Is going to an unethical tax preparer dangerous?

YES, it can be. Going to a tax preparer who increases your refunds with phantom deductions is dangerous. You may have to return that nice refund … and more, sometimes much more. A tax preparer who is incompetent can spell trouble for you. Grande problema. If the IRS audits a return prepared by an unethical tax preparer, it can flag all returns processed by that preparer. I have seen this happen with new clients: A nurse in the fifth floor gets a big refund and tells other nurses in the 6th floor. They go to the same tax preparer as a group. They get audited as a group. Ouch.

In other words, if IRS observes a pattern of fraudulent tax preparation, they may flag the entire operation’s work products – including yours. They flag all tax returns prepared by that preparer for the past several years. The problem is that all these headaches will be on you — not just your tax preparer.

Here’s an interesting blog on social media: “From personal experience, I can tell you that my former tax preparer — a person referred to me by a friend when I moved from one state to another — padded my Schedule A with unreimbursed employee expenses for uniforms. The only problem is I don’t wear uniforms for work. Well, the IRS did a wholesale audit of the preparer’s operation and I had to pay thousands back to the IRS with interest and fees. Don’t make the same mistake I did. Thoroughly vet your tax preparer before hiring.”

Here’s My Advice:

• Stay away from unethical preparers.

• Stay away from incompetent preparers.

• If you are with one now, seek another tax professional.

• You may be ahead in this game that you play, but your juicy refunds could end badly.

• Consider the law of averages.

• Leave before it catches up with you.

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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.

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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies.  He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at [email protected].

Victor Sy, CPA, MBA (retired)

Victor Santos Sy, MBA. CPA (Retired) Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation. * * * He retired after 50 years of defending taxpayers audited by the IRS, EDD, BOE and other governmental agencies. He published a book on “How to Avoid or Survive IRS Audits” that’s available at Amazon. Readers may email tax questions to [email protected].

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