What happens to me when I report my tax preparer for fraud on my 2023 taxes for filing in 2024?

Thanks for this info. I'm wondering how the IRS distinguishes between taxpayers who genuinely didn't know vs those who were complicit? Like if I signed the return, doesn't that make me responsible regardless? Also, how far back would they look at my previous returns if this preparer did multiple years for me?

The IRS looks at several factors to determine if you were unaware or complicit. Your prompt reporting of the issue, filing an amended return, and providing information about the preparer all demonstrate good faith. While signing does mean you're ultimately responsible, the IRS considers context - like whether the deductions were so obviously wrong that a reasonable person would have questioned them. If you used this preparer for previous years, the IRS might examine those returns too. It's generally best to review any returns prepared by this person and proactively amend any with similar issues. This approach shows you're taking responsibility once you discovered the problem rather than waiting for the IRS to find it.

How does that work exactly? Do they have actual tax pros reviewing it or is it all AI? I'm nervous about trusting another service after getting burned by my preparer.

I'm interested but worried about privacy. Do they keep copies of all your tax docs even after the review? And how detailed is the report - does it just say "this line is wrong" or does it explain WHY it's wrong according to tax code?

They use AI analysis but have tax experts that oversee the system. The AI compares what's on your return against your actual documents to find discrepancies, then tax professionals review the results to ensure accuracy before you get the report. They have a pretty solid privacy policy - they use bank-level encryption and don't permanently store your documents after processing. You can delete everything from their servers once you have your report. The report is incredibly detailed - it cites the specific tax code sections that apply to each issue, explains why certain deductions are incorrect, and even calculates the correct amounts based on your documents.

Wait, I don't understand how this works. The IRS doesn't just let a third party talk to them on your behalf without authorization forms. Do you give them your personal info or something?

This sounds like BS. Nobody can magically get through to the IRS faster. They're just charging you for something you could do yourself by calling at 7am right when they open.

They don't talk to the IRS for you at all. The service navigates the complicated phone menu and waits on hold (sometimes for hours), then when they finally get an agent on the line, they call your phone and connect you directly. You're the only one who speaks with the IRS - they just handle the hold time. It's completely different from calling at 7am. I tried that multiple times and still waited 2+ hours only to get disconnected. With Claimyr, I just went about my day and got a call when an agent was ready to talk. No need to share sensitive info with them - they don't need your SSN or anything like that to navigate the phone system.

Thank you, that's really good advice. I honestly didn't think to check credentials - the preparer was recommended by a coworker and had a professional-looking office. Do EAs and CPAs have some kind of verification I can check? And is there any way to see if a preparer has had complaints filed against them before I hire them?

Yes, you can verify CPAs through your state's board of accountancy - each state maintains a database where you can look up if someone is currently licensed and if they've had any disciplinary actions. For EAs, you can verify through the IRS Return Preparer Office or check the National Association of Enrolled Agents website. Unfortunately, there's no public database of complaints against preparers specifically. However, you can check the Better Business Bureau for any reported issues, and do a general search of their name plus "complaints" or "reviews." Also ask for references from long-term clients, and be wary if they're reluctant to provide them. A legitimate professional should have clients who've been with them for years and are happy to vouch for them.

This is good advice. Does the IRS ever waive the interest in cases like this where the taxpayer didn't know about the fraud? Seems unfair to charge interest when it wasn't your fault.

Unfortunately, the IRS rarely waives interest even in fraud cases where the taxpayer was a victim. Interest is considered compensation for the government not having the money when it was due, regardless of the reason for the delay. However, there are some limited situations where they might consider "reasonable cause" for penalty relief - though this typically applies to penalties, not interest. Your best bet is to document everything thoroughly when you file your amended return and complaint forms. Include a detailed timeline showing when you discovered the fraud and how quickly you took action to correct it. While you'll likely still owe the interest, having good documentation helps ensure you avoid additional penalties for negligence or substantial understatement of tax. The IRS is generally more lenient with victims who report fraud promptly and cooperate fully with the investigation.