Skip to Content

June 6, 2021


Tax preparers can land in trouble over false information

People who handle other taxpayers’ information for a living have complex jobs. Many people take tax preparers for granted and just want these professionals to get them the best refund possible. These preparers must fill out tax returns based on the information provided by the taxpayer, but they must also do their due diligence to ensure that the information provided is accurate. If they do not, the preparers could end up facing problems with the IRS.

Unfortunately, it is extremely easy for mistakes to occur on tax returns because they are often complex. Though tax preparers typically go through yearly training and stay updated on changes in tax law, even professionals can make an error. Plus, it is not uncommon for unscrupulous individuals to provide false information to a preparer in hopes of getting a better refund or lowering their tax obligation, and it can be difficult to spot who may be trying to deceive a preparer.

As a result, it is important that tax professionals watch out for these attempts, which could include the following common issues:

  • A married person filing as single or head of household when not applicable
  • A person claiming a child for a tax credit but the child does not meet the requirements for the credit
  • A person claiming that he or she made more or less than the actual income earned in hopes of qualifying for an earned income tax credit

Though the taxpayer may be the one providing the false information, tax preparers must review any documentation provided, ask questions and generally work to ensure that the taxpayer is giving accurate information. If the IRS finds the earned income tax credit errors occurred, the tax professional could end up in hot water. The penalties for such mistakes can vary depending on the exact circumstances, but it may be wise for Texas tax professionals to understand their legal options if they end up in this predicament.

Taxpreparer Investigations