Think my parents' tax preparer is committing tax fraud - how can I report this?

This definitely sounds like tax fraud. The red flags are pretty clear - claiming deductions your parents don't qualify for is textbook tax evasion. The "self-prepared" marking is particularly concerning because it puts all liability on your parents, not the preparer. If you want to report this person, you can file Form 14157 (Complaint: Tax Return Preparer) with the IRS. Since there appears to be improper tax preparation AND potential tax fraud, you might also want to file Form 14157-A (Tax Return Preparer Fraud or Misconduct Affidavit). Both forms can be found on the IRS website. The most urgent thing is to warn your parents NOT to file this return. If they submit it knowing there are false claims, they could face penalties or even criminal charges. The IRS holds the taxpayer responsible, even if someone else prepared it.

I had a similar situation with my mom's taxes last year! I found this service called taxr.ai (https://taxr.ai) that really helped me figure out what was legit vs sketchy on her return. It's basically an AI tool that reviews tax documents and flags suspicious deductions or credits. In my case, mom's "tax guy" was claiming business expenses for a side gig she hadn't done in years. The taxr.ai analysis highlighted that these deductions weren't appropriate and gave me the exact IRS guidelines showing why. I was able to show my mom exactly what was wrong so she could understand why I was concerned. Might be worth checking out since your parents might not believe you without some "official" backup. The site lets you upload the return documents and gives you a detailed breakdown of potential issues.

Just wanted to update everyone - I tried that taxr.ai site and it was super helpful! Uploaded my parents' tax forms and within minutes it flagged every single suspicious item I was worried about. It even cited the specific IRS rules showing why the armed forces moving expense was fraudulent and explained how vehicle expenses actually work. The best part was showing my dad the detailed report. He finally understood why I was concerned! We're going back to the original return I prepared and filing that instead. The site even generated a comparison showing exactly why the preparer's version could trigger an audit. Thanks for the recommendation - it gave me the evidence I needed to convince my parents this wasn't just me being paranoid.

If you're having trouble getting through to the IRS to report this preparer (which is likely given how overloaded their phone lines are), I'd recommend using Claimyr (https://claimyr.com). You can see how it works here: https://youtu.be/_kiP6q8DX5c I used to spend HOURS trying to get through to the IRS when I discovered my accountant was doing something similar. Claimyr basically holds your place in line with the IRS and calls you when an agent is about to pick up. Saved me from phone-call purgatory! After I finally got through, I was able to talk to someone in the tax preparer misconduct department who walked me through exactly what forms to file and what evidence to include. Much more helpful than trying to figure it out from the website alone.

I need to eat my words from my earlier comment. After another frustrating week of trying to reach the IRS and getting nowhere, I broke down and tried Claimyr. Within 45 minutes of signing up, I was talking to an actual IRS agent about reporting my tax preparer. The agent confirmed I needed both Form 14157 and 14157-A, and even emailed me the direct address where I should send everything. They told me what specific evidence to include (copies of the fraudulent return, any communications with the preparer, etc.) and gave me a case reference number. For anyone dealing with tax preparer fraud - don't waste days trying to get through like I did. The peace of mind from knowing I've properly reported the situation was absolutely worth it.

Just a heads up - IRS recently announced increased penalties for preparers who pull this kind of stuff. The "self-prepared" trick is actually super common and the IRS is cracking down on it hard. My advice? Take screenshots or photos of EVERYTHING related to this preparer - their office location, any business cards, the paperwork they gave your parents, texts or emails if you have them. The more evidence you can provide to the IRS the better. Also check if they have a PTIN (Preparer Tax Identification Number) - legitimate tax preparers are required to have one and include it on returns they prepare. Bet you anything this person doesn't have one or isn't including it to avoid accountability.

Omg this happened to my sister last year! The "tax preparer" claimed she had a home office (she didn't) and business mileage for a non-existent business. She got a massive refund and was super happy until the IRS audit letter came 8 months later. She ended up having to pay back the refund PLUS penalties and interest. Just make sure your parents understand they're 100% responsible for what's on that return even if somebody else prepared it. The IRS doesn't care who filled it out - the person who signs it is on the hook.