The director of a large Volunteer Income Tax Assistance (VITA) site contacted TAS with concerns about refund amounts some of her clients received on their 2015 tax returns. The VITA site director learned that one of the volunteer preparers had contacted the clients subsequent to having their return prepared at the VITA site, and became concerned that the returns filed may not be correct. TAS advised the VITA director to have the clients contact TAS directly to review their 2015 account information. As the cases were received, the case advocate determined the preparer did alter the returns prior to e-filing by adding invalid itemized deductions or credits resulting in a much larger refund than the taxpayer expected. The inflated refunds were deposited into the preparer’s bank account and then the preparer transferred the refund amount the taxpayer expected into the taxpayer’s account.
Further research indicated the same preparer filed similar tax returns impacting other taxpayers. One case advocate worked all of the identified cases, obtaining the correct return from each impacted taxpayer, and ensured the correct adjustments were made to the taxpayers’ accounts to avoid potential audits in the future. TAS worked closely with the Treasury Inspector General for Tax Administration (TIGTA) and the IRS’s Criminal Investigation Division to build a case for prosecuting the preparer. The VITA site director also sent a letter to their clients alerting them of the possibility of fraud and provided TAS contact information for assistance, if needed. As a result of this issue, additional security procedures were put into place regarding the preparation and transmission of returns at the VITA sites, as well as the screening and background checks of the volunteer preparers. This was an excellent example of TAS partnering with internal and external stakeholders to advocate for taxpayers who are victims of preparer fraud.