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.
* * *
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.
* * *
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].