Complaints Against Tax Return Preparers

Post Date: 12/15/11
Last Updated: 12/15/11

Summary

Cross References
• IRS Form 14157, Complaint: Tax Return Preparer
• Circular 230, Rev. 8-2011
• IR-2011-74, July 12, 2011

Taxpayers can use new Form 14157, Complaint: Tax Return Preparer, to report a complaint about his or her income tax return preparer and/or tax preparation business. Reporting information about a tax preparer is voluntary and the information the taxpayer provides may be used to initiate an investigation of the tax return preparer.

Background. Circular 230 authorizes any person having information of any ethical violations of Circular 230 to make a written report of the alleged violation. The release of this form is ostensibly part of the IRS’ continuing oversight program regulating the tax preparation industry. The IRS has stated that in an effort to identify “ghost preparers” (unscrupulous preparers who do not sign returns they prepare), it is sending letters to taxpayers who appear to have had assistance with their returns but lack tax return preparer signatures. The letter will also inform taxpayers how to file a complaint against their tax return preparer. It is unclear how these individual taxpayers are to be identified.

Form 14157. Information reported on Form 14157 includes:
• Specific information about who the taxpayer is reporting,
• The activity they are reporting and how they became aware of it,
• When the alleged violation took place,
• The amount of money involved, and
• Any other information that might be helpful to an investigation.

There are 20 categories provided for a taxpayer to indicate the nature of the complaint. Categories of complaints include:
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