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IRS Cracking Down on Predatory Tax Preparers In 2023 Tax Season

By: Malasia Heyward

CEO & Founder

The Boujee Bookkeeper

On a Monday that was no ordinary day, IRS Commissioner Daniel Werfel made a significant announcement that caught the attention of tax professionals and taxpayers alike. In a letter addressed to the leaders of the Senate Finance Committee, Commissioner Werfel outlined the agency's commitment to renew its efforts in combating predatory or lousy tax preparers. This announcement responds to the growing concern over unscrupulous tax professionals who exploit unsuspecting taxpayers for their gain.

The Battle Against Predatory Tax Preparers

Tax season is a time of year that often brings about stress and anxiety for many Americans. It's a time when individuals and businesses must navigate the complex and ever-changing tax code to ensure they meet their obligations and take advantage of eligible deductions and credits. In this context, the role of tax preparers becomes crucial, as they assist taxpayers in accurately and efficiently filing their tax returns.

However, not all tax preparers operate with integrity and professionalism. Some engage in unethical practices that can lead to serious consequences for their clients. This includes inflating deductions, fabricating expenses, and even identity theft. These predatory tax preparers not only jeopardize their clients' financial well-being but also undermine the integrity of the tax system.

Commissioner Werfel's Letter

In his letter to the Senate Finance Committee, Commissioner Daniel Werfel acknowledged the urgency of addressing the issue of predatory tax preparers. He emphasized the IRS's commitment to protecting taxpayers from unscrupulous practitioners and maintaining the fairness and integrity of the tax system.

Key Highlights from Commissioner Werfel's Letter:

  1. Enhanced Enforcement: The IRS will be dedicating additional resources to identify, investigate, and take action against predatory tax preparers. This includes conducting targeted audits and investigations into preparers with a history of fraudulent activities.

  2. Public Awareness: The IRS will launch an extensive public awareness campaign to educate taxpayers on how to identify and avoid bad tax preparers. This initiative aims to empower taxpayers with the knowledge they need to make informed choices when selecting a tax professional.

  3. Stricter Regulations: Commissioner Werfel also expressed the IRS's intention to work with Congress to enact stricter regulations and standards for tax preparers. This would ensure that only qualified and ethical individuals are allowed to offer tax preparation services.

  4. Collaboration with State Agencies: The IRS will collaborate with state tax agencies to strengthen oversight and enforcement efforts, creating a united front against predatory tax preparers across the nation.

The Impact on Taxpayers

Commissioner Werfel's renewed commitment to cracking down on predatory tax preparers is undoubtedly a positive step towards protecting taxpayers' interests. By increasing enforcement and public awareness, the IRS aims to create a safer environment for taxpayers and reduce the risk of falling victim to unscrupulous tax professionals.

For taxpayers, this means they must exercise caution when choosing a tax preparer. It's essential to do thorough research, check credentials, and ask for references. Additionally, taxpayers should be actively engaged in reviewing and understanding their tax returns to identify any discrepancies or red flags.

IRS Commissioner Daniel Werfel's announcement to renew efforts in combating predatory tax preparers is a significant move towards a fairer and more transparent tax system. As taxpayers, it is crucial to stay informed and take responsibility for our financial well-being. By working together with the IRS and following best practices when selecting a tax preparer, we can help ensure that tax season is a smoother and more secure experience for all. The battle against predatory tax preparers is ongoing, but with a united front, we can make significant strides toward a more trustworthy and ethical tax preparation industry.

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