IRS tightens tax-preparer oversight with random visits

The Internal Revenue Service is making it tougher for tax preparers to fudge on clients' tax returns.

The federal agency has planned random visits to some preparer's offices, this year, as a way to crack down on improperly filed or false tax returns, according to IRS Spokesman Mark Green.

Green said the agency sent out more than 10,000 letters to tax-return preparers earlier this month, reminding them of their obligation to prepare accurate returns for their clients.

The letters are the latest round in an effort to crack down on deficient tax preparation, by increasing oversight of those who prepare tax returns, Green said. They were written, and sent to inform preparers about frequent errors made in the tax-preparation process.

Green said some of the tax professionals, who received letters this year, may also receive random visits from IRS representatives, who will take part in enforcing tax regulations, and investigating tax returns.

"This is a long overdue, procedure to make sure that everyone is balanced with the professionals," Green said. "Each year, hundreds of criminal investigations are initiated against problem return preparers."

Green noted that 124 tax-return preparers were sentenced in 2009, to serve an average term of 18 months behind bars. He said the IRS plans to continue to work with the Department of Justice to pursue civil, or criminal action, when needed.

"Taxpayers are ultimately responsible for everything on their return, even when it's prepared by someone else," Green said. "Taxpayers, who pay someone to do their taxes, should choose a preparer wisely."

Taxpayers should choose preparers who have continuing education credits on tax law, said Greg Hammonds, a certified public accountant and partner of Robinson, Whaley, Hammonds & Allison, P.C., in McDonough.

"Tax law is continually changing," Hammonds said. "If you're not required to keep up with the changes, there's no way you're going to be able to prepare an accurate return."

While there are fewer new laws affecting taxpayers this filing season, he said, taxpayers should expect many more new laws to affect their 2010 and 2011 tax returns. Taxpayers should start early for the upcoming tax season, by keeping organized records of their expenses, added Hammonds.

He said his practice conducts 60 percent of its business with individuals, and he advises those taxpayers to have their tax returns filed by the third week of March, to ensure potential errors are caught before the April 15 filing deadline.

"I would ask what kind of education, or continuing education, is required of your tax preparer," Hammonds said. "I would ask how many years experience they have on returns, and if they are available throughout the year, and not just through April 15."

Hammonds said taxpayers should also be wary of false promises by tax-return preparers.

"There are certain preparers out there that will promise you big refunds," he said. "They're putting anything and everything on the returns ... but you're more likely to be audited that way."

Added Reginael McDaniel, IRS Criminal Investigations Special Agent in Charge: "Taxpayers need to be cautious of tax-return preparers who promise unexpected, large refunds. If it sounds too good to be true, it probably is."

On the net:

Internal Revenue Service: www.IRS.gov