This tax preparer sounds too good to be true… is it a scam?

Okay, I’m feeling a bit uneasy about this.

I’m a college student working a W-2 job, and I have a 1098-T for my education credits since I’m still in my first four years of school. A while back, I went tax exempt for about 12 weeks to pay off some credit card debt (not my smartest move).

Using TurboTax, I calculated my refund to be around $1,000, which makes sense because I didn’t have taxes withheld for a while. In the last two years, I got about $3,800 each year.

Now here’s the weird part: a friend recommended this guy who’s done her stepdad’s taxes for years. He doesn’t have a business name, but he claims he’s licensed. He told me he could get me a $6,000 to $7,000 refund. Am I crazy, or does this sound like some kind of IRS fraud?

He swears he’s legit, and my friend’s stepdad trusts him completely, but this feels super sketchy. What do you all think? Should I avoid him?

This definitely sounds like one of those scammy tax preparers. Check this out for reference: IRS warns taxpayers they may be scam victims if they filed for big refunds; misleading advice leads to false claims for Fuel Tax Credit, Sick and Family Leave Credit, household employment taxes | Internal Revenue Service

If he has a PTIN (Preparer Tax Identification Number), he’s allowed to prepare tax returns legally. But even if he has one, he could still be filing fraudulent returns. If you don’t have kids or a ton of other deductions, there’s no way you’d get a $6,000–$7,000 refund unless you paid that much in taxes upfront. Also, if he doesn’t sign your return and leaves it for you to file, run the other way.

Sounds like he’s gaming the system. If he won’t sign the return and leaves it to you to file, you’ll be the one on the hook if anything goes wrong. Try FreeTaxUSA—it’s a solid option for simple returns, and it’s mostly free.

@Hero
FreeTaxUSA charges $0 for federal and $14.99 for state. You could skip paying for the state return and file it directly on your state’s tax website.

If you don’t have kids, there’s no way you’re getting that kind of refund. The education credit maxes out at $2,500, and only part of that is refundable. This guy is definitely messing around.

No reputable tax preparer will promise a refund amount before seeing all your documents. That’s a huge red flag.

Glad I’m not the only one who feels this is off. I’ve always done my own taxes and will probably stick to that. This just feels so shady.

Shan said:
Glad I’m not the only one who feels this is off. I’ve always done my own taxes and will probably stick to that. This just feels so shady.

You should ask him for his PTIN. Also, tax preparers are now required to have a Written Information Security Plan (WISP). Ask him for a copy of that too.

Keep in mind, there’s no statute of limitations for tax fraud.

This sounds super shady. Remember, if the IRS catches fraudulent claims, you’re the one who has to pay it back, not the preparer.

Dolph said:
This sounds super shady. Remember, if the IRS catches fraudulent claims, you’re the one who has to pay it back, not the preparer.

Do they actually catch these people? Because it’s wild that this happens at all.

@Shan
Sometimes. Shady preparers often mark the return as ‘Self-Prepared,’ so the IRS doesn’t even know they were involved. But the IRS has been cracking down more lately.

Dolph said:
@Shan
Sometimes. Shady preparers often mark the return as ‘Self-Prepared,’ so the IRS doesn’t even know they were involved. But the IRS has been cracking down more lately.

How often do individuals get caught then? This feels so risky.

@Shan
It happens a lot. Refunds get held up, and the IRS asks for more info. If you can’t back it up, you’ll have to pay it back with penalties. They’re getting better at catching these scams.

If TurboTax says your refund is around $1,000 and you’ve entered everything correctly, that’s what you should expect. Stick to that and avoid this sketchy tax prep guy.

If you’re unsure, you could go to H&R Block or a similar service and have them do a draft. It’ll cost you, but it’ll confirm your numbers.

Does this guy pull refunds out of thin air or what?

If he’s promising a big refund without seeing your documents, he’s probably planning to lie on your return. You can check his credentials through your state’s accountancy board or the IRS PTIN database, but even licensed preparers can commit fraud.

Check out a VITA site near you if you need help. They offer free tax preparation for people earning under $65,000.