Ever turn in ex-client for fraud?

[beck]

Just wondering if anyone has turned in an ex-client for fraud? What happened? Seriously thinking of it right now. Maybe tomorrow I'll cool off.

Thx.
beck

[bgiez]

No -

I would inform them of the penalties for what they want to do, and refuse to do an inaccurate return. If I find out after the fact, I would advise them that an amendment is needed, and would prepare it. It would be up to them to pay the preparation fee and file the return.

[taxxcpa]

Fraud

I would inform them of the penalties for what they want to do, and refuse to do an inaccurate return. If I find out after the fact, I would advise them that an amendment is needed, and would prepare it. It would be up to them to pay the preparation fee and file the return.

I had one who was claiming HOH. First he came with his wife and then he came back and said they were divorced. I took his word for it and he claimed one child.

He paid me in cash the first time or two, then, one year he gave me a check which was on a joint account, so I refused to do his returns any more. He swore up and down that he was really divorced and just hadn't changed the bank account, but it looked too fishy for me to continue with him.

I was tempted to turn him in, but I didn't.

[Uncle Sam]

Client Fraud

I had a case 2 years ago - a lady comes to me - her mother was my client- I see prior year was a joint return with a dependent child.
In questioning the new client - her husband is living in a foreign country, son is age 27 living with her. She wants to file a joint return, but wants the refund only in her name.

I gave her the W-2 - out the door she went.

I still have her mother as a client.

[FEDUKE404]

Show them the door and move onward

After having worked in the past for a couple of years at a well-known "store-front" tax business (a friend owned the franchise) I probably could take an early retirement if I reported all the likely fraudulent returns that went out. (Well, not really - the IRS would probably have yawned...although that is a different topic of discussion.)

But the line in the sand is the fraudulent type vs the much more common working-the-system type long prevalent in the land of EITCs and RALs.

In answer to the original post, I would likely not "turn in" anyone except for perhaps truly criminal activity. Even with that, a reasonable person would have to weigh the effects that might occur for the business of a tax professional who the public might perceive as having a bit of a short fuse or "working for the IRS."

Of course, this is an entirely separate issue from preparing a current return for a client who I knew or strongly suspected was filing a return with misstated information. If an agreement could not be reached, I would politely show him/her the door.

FE

[JG EA]

Agree.
Think of the consequences. Committee awareness of you turning in clients. Possible court procedings when you are sued because you didn't know all the circumstances. Or sued when you ruined someone's good name when they were just asking a question the 'didn't really apply to them'.

Also think about the requirements to keep confidentiality.

Also think about how you would feel if someone turned you in when you had done nothing wrong and it just looked like it to them.

It is not our job.

[Gary2]

What exactly are the rules around that? I know that only attorneys have the attorney-client privilege, so that non-attorney tax preparers can be required to reveal information if the IRS subpoenas. But I thought there were different rules around volunteering information.

[beck]

Appreciate all the input. There is a form to report without revealing your identity.