Susan is in big trouble.
It all started when it was time to file her very first income tax return–she took her financial records to a tax preparer.
HANK
"Did you know how to do your own taxes?"
"Susan"
"No, I couldn’t even begin to start."
So Susan signed on the dotted line-thinking everything was good to go..but months later-disaster. She’s now being audited. Making it worse: the person who did her taxes–is nowhere to be found.
Susan
"I hope what’s she’s doing is stopped before she does this to someone else."
Will your tax preparer give you tax trouble? When the inspector general’s office did a sting of them in 2008–65 percent of the returns they looked at, had major mistakes! And they found–there was no system to make sure these tax preparers knew what they were doing.
J. Russell George, US Treasury Inspector General
"The IRS should do everything within its ability under the law to ensure that taxpayers are not duped by unethical tax preparers."
As a result the IRS now is requiring all tax preparers register with a special Tax Identification Number. That sounds like a good thing–so was Susan’s preparer properly signed up? Susan had certainly asked.
Susan
"She knew what she was doing and that she had done this a million times–so she knew she was certified."
But when we tried to check on that with the IRS–we got some shocking news. There’s no way to find out if it’s true.
HANK
So right now, is there any way to confirm they are registered?
Peggy Riley, IRS
"Well, no."
That’s right–though the IRS is cracking down on unscrupulous tax preparers by making them sign up with the feds–there’s no way for taxpayers to make sure their ID numbers are for real.
HANK
"So if you’re suspicious, there’s no way to check?"
Peggy Riley, IRS:
"At this point, no."
And who are the bad guys? You can’t find that out either. This 2007 federal audit revealed "the IRS cannot determine how many complaints against tax return preparers it receives." What’s more it found–most complaints were "ultimately destroyed."
Officials insist they do plan someday–they hope soon–having tax preparers information in a searchable database and complaints available to the public. But right now, how are you supposed to make sure the tax preparer you choose is reputable? The IRS has some tips on that-click here to read them.
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