tax fraud alertGeorgia Watch uncovers excessive tax return discrepancies and fees.

It never ceases to amaze me. The person who cuts my hair (what’s left) is licensed and registered by the state of Georgia. The person who does my wife’s nails is licensed and registered by the state of Georgia. But any adult, regardless of experience or skill, can charge consumers to prepare their tax returns. Only CPAs, certain attorneys, and IRS enrolled agents are required to meet any standards – less than half of all paid tax preparers.

Georgia Watch exposes questionable tax preparation practices

Earlier this month, the non-profit watchdog group Georgia Watch published the results of its “secret shopper” study of paid Atlanta tax preparers. The study, conducted during the 2015 tax filing season, uncovered a general lack of tax code knowledge, inconsistent fees and procedures, and a wide range of outcomes to what should have been the preparation of some simple tax returns.

The study included phone calls in response to tax preparer job postings, a resident survey, and actual visits by consumers posing as clients. Large chains as well as small firms were included – leaving no strip mall unturned. Here are a few of the alarming findings reported by the Georgia Watch study:

  • Tax preparer training varied widely from 2-16 hours, with many firms requiring no previous experience.
  • Preparers shared IRS Preparer Tax Identification Numbers, which is against IRS regulations.
  • Federal and state refunds tended to be inflated, even when the consumer actually owed taxes.
  • High fees were charged, with preparer commissions based on tax refund amount.
  • Unknown to consumers, “free” tax prep fees were deducted from refunds.

Problems weren’t limited to a few bad apples. Almost all tax returns completed as part of the study had some sort of discrepancy or outright error, as verified by VITA, the IRS Volunteer Income Tax Assistance Program. Click here to read the full Georgia Watch report.

Don’t make the same mistake

Here are three things you can do to limit your chances of being ripped off by an unscrupulous strip mall tax preparer:

  • Get it in writing. Ask about fees in advance and in writing.
  • Check the PTIN. Verify your preparer’s credentials on the IRS website.
  • Confirm support. Make sure that the firm is open all year and will back their work in case you’re audited by the IRS.

Please help combat tax fraud – forward this article to friends and family

Most of you reading this already have your tax returns prepared by the experienced CPAs and team at Bach, James, Mansour & Company. Please forward this warning to your children, friends, and family, as there are similar tax preparer licensing issues in 46 other states. Only Maryland, Oregon, California, and New York require preparers to meet minimum standards.

Learn more about Georgia Watch

Founded in 2002, Georgia Watch is a 501(c)(3) non-profit, non-partisan organization that works to ensure Georgians are educated and protected on matters that impact their wallets and quality of life.

Georgia Watch is advocating for some common sense tax preparation rules and regulations, including:

  • Registration and licensing of tax preparers
  • Competency exams
  • Continued education requirements
  • Documented fee schedules
  • A state oversight board

For more information or to sign up for email updates, visit the Georgia Watch website at www.georgiawatch.org.

Neal Bach, CPA