The IRS claims to be targeting 'unscrupulous' preparers by identifying patterns of suspicious returns with computer programs. The IRS wills seek an initial injunction barring the individual from preparing returns, requiring him/her to send a letter to current clients notifying them that their return may contain fraud, and demanding a list of all current/past clients.
*Former tax preparer Cruz admitted that he engaged in results-based tax return preparation, where the goal is to maximize refunds rather than accurately report his customers’ actual income and allowable credits and deductions. Although many of Cruz’s customers would bring copies of their tax documents, such as Forms W-2 and 1099 and receipts for potentially deductible expenses, Cruz often ignored them and instead reported unsupported amounts on customers’ federal income tax returns. Cruz admitted that he prepared more than 7,000 federal income tax returns for tax years 2004 to 2008.
I am sure all of these 7000 clients had been bragging to their friends about their great preparer. The honeymoon is likely over! We have SEVERAL Delaware preparers who practice in this manner. I certainly hope their days our numbered. Keep in mind that 'the favors' your preparer does for you (making up charitable and business deductions that are 'acceptable') he/she may do for many people making it easy for the new IRS computers to catch them. Every return has $5000 in charitable deductions, etc. Duh!