Pop Quiz #1: What is the quickest way to spot an fraudulent tax preparer?

Answer: When the preparer guarantees an "big" refund without even looking at your tax documents.

Pop Quiz #2: Why would a tax preparer promise tax refunds?

Answer: Some preparers build their business around the idea of receiving big tax refunds. They are attracting a certain type of client that only wants a refund without asking why or how they got it. Also, some preparers make a killing charging for bullshit tax refund advances. Most of these advances target low income people.


Lets do a quick technical recap on how someone can receive an tax refund:

A tax refund is the difference between taxes paid and taxes owed. Each year a taxpayer submits a tax return that calculates his or her federal income taxes owed. The taxpayer then submits the tax return and the IRS reviews the information. If the taxpayer has paid more taxes than he or she owes, the IRS will issue a refund.Typically, tax refunds occur because employees have too much withheld from their paychecks.

What are REALLY tax refunds:

1. The government gets an interest-free loan, courtesy of your paychecks
2. You have less ability to grow wealth, due to smaller paychecks from tax overpayment.

Yes, there are some situations that tax credits like the Earned Income Tax Credit (EITC) can just about give you a refund almost every time. However, even with the EITC there are a
lot of conditions that have to be met before you are even eligible. Therefore, for someone to guarantee a big refund is a big liar. Some preparers will include all types of false information to get their client to qualify for various tax credits. You may ask, how do I know? Well, I have represented many clients in front of the IRS that got caught and had to repay their refund back with a crazy amount of INTEREST attached to the repayment agreement. I'm not here to speak negatively about receiving refunds. We are all adults and you have to live your own life. My point is don't cheat to get a refund. Don't seek out accountants that prepare fake tax returns so you can get a refund. Don't trust someone that guarantees a refund without reviewing your tax documents. Don't start using other people's kids on your tax return. JUST BE SMART!!!