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PREPARERS BEWARE! (AND BEWARE UNSCRUPULOUS PREPARERS)

March 05, 2003

Tax Notes reports "The IRS has announced that it has more than doubled the number of criminal investigations of return preparers in 2002, resulting in more prosecutions and longer average prison terms." (IR-2003-23)

-Claiming that they can obtain larger refunds than other preparers,

-Basing their fee on a percentage of the amount of the refund, and

-Refusal to sign the tax return or provide the taxpayer with a copy for their records.

Another bad sign: the preparer accrues large fees to himself with an adjusting journal entry.

A few other warning signs the IRS didn't mention:

-When you arrive at the preparer's office, he demands a password before opening the door.

-He hands you your return and says "you didn't get this here."

-He prepares the return in the back seat of a car while instructing the driver to take evasive measures.

-He asks if he can use your bank account information to help a Nigerian Prince reclaim his rightful inheritance.

-Your preparer looks like this.

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