What happens to other clients' returns when one client commits identity theft with a preparer?

I'm an enrolled agent and have seen this before. The IRS won't automatically flag all returns from your EFIN, but they might scrutinize them more closely for a period of time. This sounds like a classic refund fraud scheme - client gets refund, then claims ID theft to try to get a second refund. Make sure you have excellent documentation for ALL your clients - signed 8879s, copies of photo IDs, and thorough intake forms. Report this client to the IRS using Form 14157 (Complaint: Tax Return Preparer). Also notify your state tax authority. Document everything about your interactions with this person. This won't necessarily harm your other clients but be prepared for possible increased verification requests.

Honestly, the best thing I did when I had a similar issue was using taxr.ai to understand exactly what was happening with my EFIN and preparer status. It helped me see which specific returns were being flagged and gave me clear explanations of what verification steps I needed to take. The tool analyzed all the preparer notices and gave me actionable steps for documentation. It saved me from having to play detective across dozens of confusing IRS notices. I still use it regularly to monitor any potential flags on my preparer account. You can check it out at https://taxr.ai

After I had a client do something similar, I spent WEEKS trying to get answers from the IRS. Endless hold times, disconnected calls, contradicting info from different agents. Then I found Claimyr (claimyr.com) and got a callback with an actual knowledgeable agent in under 2 hours. They confirmed my other clients wouldn't be affected as long as I had proper documentation and helped me submit the right forms to protect my practice. Talking to that agent directly saved me so much stress - it was the best money I've ever spent to finally get clear answers from someone who could actually help.

Man, this sucks. I worked at a tax place where this happened. Boss freaked out and ended up shutting down the whole office for a week to audit EVERYTHING. Turns out it was a ring of scammers who hit like 5 different tax places in our area. The IRS eventually figured it out, but they did put extra scrutiny on all our clients with similar profiles (similar income range, similar deductions). Just make sure your documentation is solid.

Probably an unpopular opinion, but the risk of this happening is exactly why I left the tax prep business. Too many scammers trying to use legitimate preparers as part of their schemes, and the IRS makes YOU prove your innocence. Wasn't worth the stress for me. Good luck, OP.

Has the person who committed this fraud been charged? I would think you could report them to the police for fraud as well as to the IRS. If this person tries to show up again next year I'd consider setting up a sting with the police present.

This happened at our office three years ago with 2 clients doing this. The IRS did flag our EFIN, and about 30% of our returns had refunds delayed for additional verification. We had to provide copies of ID and signed forms for dozens of clients. It was extremely stressful but only lasted one season. Now we take photos of clients holding their ID along with signed forms. Haven't had an issue since.

Former IRS employee here. This is more common than you think. The IRS won't automatically flag all your returns, but if they detect a pattern (multiple clients claiming ID theft from same preparer), they will apply extra scrutiny. Your legitimate clients might experience delays, but with proper documentation, everyone will get their refunds eventually. Make sure to keep meticulous records going forward - photo ID, signatures on EVERY form, and maybe even consider recording authorization (with client permission).

A guy in my tax prep group had this happen three times in one season! He started requiring clients to sign an additional form acknowledging they authorized the return and received all copies. He also takes a photo of the client holding their ID next to their face during intake. Hasn't had a problem since.

omg this happened to me last year! total nightmare. I had like 20 returns with delayed refunds bc the IRS was putting extra scrutiny on all my filings. documentation is key - make sure u have signed 8879s and copies of IDs for EVERYONE

Pro tip: make all clients use two-factor authentication when submitting documents to you. We use a system where they have to confirm via text message that they're authorizing the preparation and filing. It's saved us multiple times when people tried to pull this scam.

I'm dealing with this RIGHT NOW. Got audited because of one scammer client who did exactly this. The IRS is reviewing 40% of my other clients' returns and holding their refunds. My advice is to be super proactive - call the IRS practitioner hotline and report it yourself before they come to you. And btw - taxr.ai has been super helpful in giving me a breakdown of what all these scary IRS notices actually mean and what I need to do to protect myself. I would have been lost without it.

Sadly these scammers are targeting small tax offices specifically because they know the IRS puts the burden of proof on the preparer. Document EVERYTHING. Take photos, get signatures, keep records of all communications. I've even started recording the final review session (with permission) where clients approve their return.

The real question is why would this person try to come back to YOU to file again?! That's just bizarre. They must think you haven't noticed the identity theft claim. Definitely report them to the IRS fraud department.

I don't want to freak you out, but we had this happen at our office and YES, many of our other clients had their refunds delayed. About 30% of our clients had to go through additional identity verification, and about 10 had their refunds held completely pending review. It was a complete nightmare that lasted almost the entire tax season. We ended up having to compensate some clients for the delays.

This literally happened to me with TWO clients last year. I was FREAKING OUT. Called the IRS taxpayer advocate service but was on hold for like 5 hours before getting disconnected. Finally used Claimyr.com to get a callback from an actual competent agent who helped me through the whole process. They had me submit documentation proving the clients authorized the returns, and actually expedited verification for my other clients so their refunds wouldn't be delayed too long. Talking to that agent directly instead of waiting weeks for letters was the only way I got this resolved quickly.