IRS Criminal Investigation Division warns taxpayers of dishonest tax return preparers

The Internal Revenue Service’s Criminal Investigation Division is reminding taxpayers to file accurate tax returns and choose a tax preparer wisely. 

The nation’s tax season starts tomorrow, Friday, Feb. 12, when the agency begins accepting and processing 2020 tax year returns. 

U.S. persons are subject to tax on worldwide income from all sources. Most taxpayers meet this obligation by reporting all taxable income and paying taxes according to the law. However, those who willfully hide income should know that the IRS works across its divisions to ensure the highest possible tax compliance. 

Taxpayers found to be committing fraud may be subject to penalties including payment of taxes owed plus interest, fines and jail time. 

“Regardless of the source of income, all income is taxable,” Andy Tsui, Special Agent in Charge for the state of Wyoming said. “The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS’ enforcement strategy. We continue to aggressively pursue those who attempt to defraud America’s tax system.” 

Tax return preparers are vital to the U.S. tax system. As of tax year 2018, 55 percent of taxpayers used a paid preparer. Although most preparers provide honest and professional services, there is a small number of dishonest preparers who set up shop during filing season to steal money, personal and financial information from clients. Taxpayers can avoid falling victim to unscrupulous preparers by following important steps. 

Tips when choosing a tax preparer: 

• Look for a preparer who is available year-round in case questions arise after the filing season. 

• Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN), which is required for paid preparers. 

• Inquire about the preparer’s credentials and check their qualifications. 

• Ask about service fees. Avoid preparers who base fees on a percentage of their client’s refund or claim to offer a bigger refund than their competition. 

• Never sign a blank or incomplete return and review it before signing. Refunds should go directly to the taxpayer, not the preparer. 

For more tips on choosing a tax professional or to file a complaint against one, visit IRS.gov. Taxpayers who suspect tax violations by a person or business, may report it to the IRS using Form 3949A, Information Referral. 

The IRS Criminal Investigation Denver Field Office is committed to protecting Wyoming taxpayers from others cheating the U.S. tax system. 

According to the IRS, Debbie Ridgley, owner of Gma’s Restaurant in Mills, Wyoming was sentenced on Dec. 1, 2020 for tax evasion. Ridgley skimmed cash and tips from her business and falsified business records to reduce her business’ income. The falsified business records were then used to prepare false federal income tax returns. As part of her sentence, Ridgley was ordered to pay $16,964 in restitution to the IRS and a fine of $5,500.