Is it normal to see so many sketchy tax preparers promising huge refunds?

What about those storefront tax places that have the person dressed as the Statue of Liberty dancing outside? Are those legit or are those the ones to avoid?

The national chains with seasonal mascots vary in quality. They're generally not fraudulent, but the preparers often have minimal training and experience. Many are seasonal employees who completed a short training program. They're probably fine for simple returns but might miss opportunities or make mistakes on more complex situations. If you want quality preparation without spending a fortune, look for an enrolled agent (EA) or a CPA who specializes in individual taxes. They have extensive training and certification requirements that the seasonal preparers don't.

Does it actually review everything line by line? I'm worried about tax fraud but also about missing legitimate deductions I'm entitled to. Does it help with that too?

I'm a little skeptical - how does it actually know what the IRS would flag vs allow? Like, is it connected to the IRS somehow or just guessing?

It does review everything line by line, comparing your documentation against what's being claimed. It's especially good at catching discrepancies between your W-2s, 1099s, and what's being entered on the return. It found that I was eligible for a student loan interest deduction my preparer missed, so it definitely helps find legitimate deductions too. It's not connected to the IRS, but it's built on the same validation rules the IRS uses. It cross-references information across forms and checks if claims are supported by proper documentation. Think of it like having a second opinion from another tax professional who's focused on keeping you safe rather than promising a huge refund.

Wait, isn't this just paying someone to wait on hold for you? How do you know they're not just scamming you too?

This sounds way too good to be true. No way they can get through when no one else can. The IRS phone system is completely broken.

It's exactly what you described - they have a system that waits on hold with the IRS so you don't have to. When they reach an agent, they call you and connect you directly to that agent. You're not giving them any personal information besides your phone number. The reason they can get through when individuals can't is because they have multiple lines calling simultaneously and sophisticated software that navigates the IRS phone tree and detects when there's an actual human. I was skeptical too, but when I was connected to an actual IRS employee who verified they were with the IRS, I knew it was legitimate. It's basically just an efficiency solution to a broken system.

That's insane! Did they explicitly tell you to do questionable/illegal things or was it more implied? I'm curious how they get away with this.

They never explicitly said to do anything illegal, but they created incentives that encouraged it. For example, they'd say things like "make sure to ask DETAILED questions about business expenses" with a wink when someone was clearly just a W-2 employee. Or they'd suggest "helping clients remember" charitable donations they might have made. The real issue was the commission structure. We got paid more for returns that generated larger refunds. So there was a direct financial incentive to find/create more deductions and credits, whether legitimate or not. Most of my coworkers justified it by saying the IRS rarely audits people with incomes under $100k, so clients would "probably get away with it.

Is there a way to report these places? There's a tax office near me that has a giant sign saying "WE GET YOU MAXIMUM REFUNDS GUARANTEED" and they advertise that they "only charge a percentage of what they save you." Seems super sketch.