How to Report Tax Preparer Misconduct

If you believe a tax preparer or advisor has acted improperly, you have options. Reporting misconduct can protect you and others. This guide describes, in general terms, what to gather and where complaints can be made. Agencies and forms change, so confirm current procedures using official sources. This is not legal advice.

What Counts as Misconduct

Misconduct can take several forms. Examples include preparing a return with false information, claiming credits or deductions the taxpayer did not qualify for, failing to sign as a paid preparer, keeping or diverting refunds, charging improper fees, failing to file returns after being paid, misusing personal information, and misrepresenting credentials. Not every unsatisfactory outcome is misconduct. A disagreement about a tax position or a mistake may be a professional or contractual matter instead.

Protect Yourself First

Before you report, protect yourself. If the return is wrong, you may need to correct it. Consult a qualified professional promptly. If your personal information was misused, take steps to protect your identity, such as placing fraud alerts, monitoring accounts, and contacting the IRS identity protection resources. If money was taken, consider notifying your bank and, if appropriate, law enforcement.

Gather Documentation

Collect everything relevant:

• Copies of returns and any drafts.
• Engagement letters, invoices, and receipts.
• Emails, texts, and other communications.
• The preparer's name, firm, address, phone number, and identification numbers.
• Bank records showing payments and refunds.
• Notes describing what happened, with dates.

Organize the information in chronological order. A clear, factual summary helps agencies understand your complaint.

Reporting to the IRS

The IRS accepts reports about tax return preparers. Taxpayers can use a form for reporting a return preparer complaint, and separate forms exist for reporting suspected tax fraud or referring information about tax law violations. The IRS office that oversees practitioners also handles complaints about professionals who represent taxpayers. Use current instructions on the IRS website to choose the right form and to learn what information is required.

Reporting to Licensing Bodies

If the professional is a CPA, you can file a complaint with the state board of accountancy that issued the license. If an attorney, contact the state bar. If an enrolled agent, contact the IRS office responsible for practitioner standards. Licensing bodies can investigate and impose discipline. Each has its own process.

State Tax Agencies and Attorneys General

State tax agencies may accept complaints about preparers who violate state law. State attorneys general and consumer protection offices may handle complaints about deceptive practices. If the conduct involved fraud, contact them.

Other Reporting Options

Consumer protection agencies and business bureaus may accept complaints, but they may not have authority over professional discipline. Law enforcement may be appropriate for theft or identity theft. If you lost significant money, consider consulting an attorney about civil remedies.

What Reporting Can and Cannot Do

Reporting may lead to investigation and discipline, and it can help protect others. It may not result in recovery of your money or correction of your return. Agencies often do not provide updates. Do not rely on reporting as your only step. Continue to address your own tax situation and, if needed, pursue remedies with an attorney.

Correcting the Return

If your return contains errors, work with a qualified professional to correct it. You may need to file an amended return and respond to any notices. Acting promptly can reduce penalties and interest. Explain the situation, and provide documentation. See How to Document the Advice You Receive.

Avoiding Retaliation and Confusion

Do not confront a suspected fraudster in a way that endangers you. Communicate in writing where possible. Do not agree to sign new documents without review. If the preparer contacts you and asks you to change your account information, be careful.

Keep Records of Your Report

Keep copies of every complaint and any responses. Note dates and reference numbers. These records may be useful if further action is needed.

Prevention

Many problems can be prevented by verifying credentials and asking the questions in this site's guides. See Verifying a Tax Professional's Credentials and Red Flags When Hiring a Tax Advisor.

Time Sensitivity

Some steps are time-sensitive. Amended returns have deadlines, notices have response dates, and identity protection steps are more effective when taken quickly. If you suspect misconduct, address the urgent items first: secure your accounts, correct your return if needed, and respond to notices. Then take time to prepare a careful complaint. Reporting is important, but protecting yourself comes first.

Bring in Another Professional

Consider asking another qualified professional to review your return and the situation. They can tell you what is wrong, what to correct, and how to describe the problem accurately in a complaint. Their review also creates a record of the issues found.

Educational purposes only. This page is general education and is not tax, legal, or accounting advice. Descriptions of how AE Tax Advisors approaches engagements are general, and the scope, timing, and fees for any engagement are confirmed with you directly. Tax laws change and outcomes depend on individual facts. No result is guaranteed.