Investing in You: Warning signs of crooked tax preparers / Advice on How to choose / select a Tax Preparer

Erin E. Arvedlund for Philly.com writes:  With the onset of the 2015 tax-filing season, here are cautionary tales of a man and a woman whom you don't want preparing your taxes. 

The Department of Justice and the Internal Revenue Service highlight some of the brightest red flags among fraudulent tax preparers.

These two local folks were doozies.  In 2013, "Archie" - full name, Adekunle Adetayo Adeolu - was sentenced to prison and $135,519 in restitution after filing false tax returns. He operated Adeolu & Okojie, a tax-service business in Philadelphia.

Red flag: When a client owed federal taxes, Adeolu would sell that person a name and Social Security number in order to claim a stranger as a dependent, then falsely claim an income tax credit or a child tax credit. 

 

In August 2014, Dawn Chamberlain, of Claymont, Del., was sentenced to 51 months in prison and ordered to pay restitution of $833,160. Between 2009 and 2012, Chamberlain filed more than 450 false individual federal income tax returns for others, claiming more than $730,000 in credits, to which her clients were not entitled.

Red flag: Chamberlain deposited client refunds into her own bank accounts. She returned less than the full amount of the refunds to her clients, and also used client names, dates of birth, and Social Security numbers to file fraudulent New York State Resident income tax returns, requesting refunds of more than $210,000.

How can we avoid these nasties? 

Dishonest tax preparers employ a bag of tricks, including inflated or phony expenses; charitable contributions; medical and dental expenses, and false dependents. 

Many people accused of tax evasion just make mistakes. These were criminals.

Pro preparers

If you can afford one, there are different types of return preparers. Visit the IRS website to learn more (IRS.gov/chooseataxpro). 

Avoid tax return preparers who claim or advertise that they obtain larger refunds than other preparers.

Avoid preparers who base their fee on a percentage of the amount of your refund. Check fees upfront.

A reputable tax professional signs and enters a preparer tax identification number (PTIN) on your return and provides you with a copy for your records.

Anyone with a valid 2015 PTIN is authorized to prepare federal tax returns.

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