Tax preparers diverting refunds to their accounts - is this legal or a total scam?

I had this happen to me 3 yrs ago. filed feb, waited til june for 'processing fees' to clear and then my tax person ghosted me! Eventually got partial refund but still lost over $600

Thanks for this explanation. How long does it usually take for the IRS to investigate after filing Form 14157? My cousin is still trying to get her full refund back.

Unfortunately, IRS investigations can take months, sometimes even a year. They're serious about fraud but extremely backlogged. Tell your cousin to document EVERYTHING - all communications, copies of returns, any fee agreements. That'll help her case.

But some legit services do hold refunds right? My tax place charged me $150 for my return and then took it out of my refund when it came in. Didnt seem shady, i signed something for it

What you're describing is a Refund Transfer product - it's technically legal if properly disclosed, but often overpriced. They created a temporary bank account to receive your refund, took their fee, then sent you the rest. The problem isn't the concept itself but when they add hidden fees or don't explain it clearly.

Sounds interesting. How exactly does it work? Does it just read your transcript or does it do more?

It does way more than just reading transcripts! It breaks down every line item, explains all the codes, shows you exact timelines, and flags unusual things like extra fees or unexpected charges. I'm not tech-savvy at all but it was super easy to use. It even showed me I qualified for an additional credit my preparer missed 🙌

is this one of those free trial then charges you $$$$ things?

OMG no! That's actually why I love it so much. I've tried those 'free' tax services before and ended up paying like $200 for 'premium features' 🙄 This was straightforward and totally worth it. Saved me so much headache trying to decode IRS jargon.

Wait for real? I've been calling the IRS for 3 weeks and never get through. How does this work?

It uses some kind of system that keeps calling for you and holds your place in line. When they get an agent, you get a call back. Seriously the best thing ever after trying to call myself for days and getting that stupid "due to high call volume" message. The agent I talked to was actually super helpful once I finally reached a real person.

another app that charges you to access a government service we already pay taxes for? 🙄

Normally I'd agree with you, but after wasting 20+ hours trying to call myself and never getting through, it was worth every penny. I got my missing $600 back because I could actually talk to someone who could help. Sometimes you gotta spend money to get your money 🤷‍♂️

omg please spill more tea ☕️ i wanna know all the scams they pull

Where do I even start 😩 They'd have us target people with EICs and child tax credits (biggest refunds), push unnecessary audit protection ($79), charge for state returns that take literally 5 mins to do ($59+), and the worst was telling people with simple returns they had "complex situations" to justify the $300+ fees. I quit when my manager told me to stop telling clients about free filing options.

This is exactly the kind of stuff I'm talking about! Completely predatory.

You need to talk to an actual person at the IRS. I used claimyr.com to get through to someone when I had a similar issue. Got my case escalated way faster than just filing a form online.

thx gonna try this today. im so tired of being scammed and then scammed again trying to fix being scammed lol

Also report to your state's attorney general consumer protection division! They actually have more teeth than the IRS for this stuff sometimes.

dam thats a lot of money. did she ever get it back??

Nope. By the time she realized what happened, the guy had disappeared and changed his phone number. She filed a police report but they basically said it was a "civil matter" 🙄

Not everyone can "just do their own taxes." Some people have complicated situations, don't understand tax laws, or don't have the time or resources. This victim-blaming isn't helpful.

I'm not victim blaming, just saying there are better options than sketchy storefronts. Even if you have a complicated situation, there are legitimate CPAs who don't pull these scams.

Yep I tried to do my own taxes one year and ended up missing thousands in deductions I qualified for. Sometimes paying a professional makes sense...just make sure they're ACTUALLY professional.

Oh great ANOTHER tax service wanting my money 🙄

actually it's not even a tax service, it just helps you understand what's happening with your refund. it doesn't file your taxes or anything. just helps you see if someone's skimming money off your refund. wish I'd known about it years ago when my first tax guy was taking an extra 12% without telling me 😩

does the IRS actually do anything with these complaints? feels like they go straight to the trash 🗑️

They actually do investigate! The problem is it can take 6-12 months because they're so understaffed. But I've seen preparers lose their PTINs and even face penalties. Document everything carefully and be patient.

The trick is to get through to an actual person at the IRS. I couldn't for weeks. Then I used claimyr.com to get an agent on the phone and my case was resolved in less than a month after that.

Does this actually work or is it just another way to get more money out of people who are already being scammed?

It's the real deal. I was skeptical too but desperate after waiting 2 months for a refund that should've taken 2 weeks. It showed me exactly where my money was, what codes meant on my transcript, and helped me understand why there was a delay. In my case it was because the preparer had filed for a refund advance I never requested. The tool flagged it right away.

claimyr.com my friend. saved me hours of hold music torture. they got me through to someone who was actually helpful.

THANK YOU! Just tried it and going to get a callback in about an hour they said. So much easier than the traditional IRS phone tree hell.

this is literally what H&R Block did to me but when i complained they said it was all in the "fine print" that i signed 😡

Yep, they're notorious for this. They technically disclose it but in dense legalese buried in page 18 of a document they rush you through signing. Always ask for a fee schedule BEFORE they prepare anything.

This happened to me and I couldnt figure out what was happening with my refund for weeks. Used taxr.ai and it showed me exactly where my refund was and all the extra fees being taken out. Helped me file a complaint with actual evidence.

how much was the claimyr thing? wouldn't it just take more of her money?

It was totally worth it compared to the $550 she was scammed out of! I can't remember the exact price but it wasn't much. After trying to call the IRS ourselves for days and never getting through, it was the best option. The agent she talked to actually helped her file the right forms to get the money back.

Don't waste your time with the regular IRS number. I used claimyr.com after trying for weeks to get through. Got a call back with an agent in about 2 hours. They helped me file a complaint that actually got acted on.

omg thank you!! gonna try this today, been pulling my hair out trying to get this resolved