My Tax Preparer Lied On My Taxes (Here’s What To Do)

Finding out your tax preparer lied on your taxes is one of those moments where your stomach just drops. 

You trusted someone to handle something stressful, signed where they told you to sign, and moved on with life. Then something feels off. A letter shows up. A number doesn’t make sense. Suddenly you’re stuck cleaning up a mess you didn’t create.

The good news is this isn’t the end of the world, even if it feels heavy right now. 

There are clear steps you can take to fix the return, protect yourself, and stop the problem from getting bigger.

In this post, we’ll show you what to do if your tax preparer lied on your taxes.

#1. Confirm What Was Actually Wrong

Before you panic or start firing off angry emails, you need clarity. 

Get a full copy of the tax return that was filed, not a draft, not a summary. The actual submitted return. Then compare it line by line with your real documents.

Look closely at income, deductions, credits, and dependents. A lot of issues come from inflated expenses, income being left off, or credits added that you never discussed. 

Sometimes the lie is obvious. Other times it’s subtle and buried in a schedule you barely remember talking about.

Here are common red flags people find when they dig in:

• Income missing that you clearly earned
  
• Business expenses that were exaggerated or completely made up
  
• Dependents listed that you never claimed
  
• Credits you never qualified for or even discussed

You first need to understand exactly what’s wrong so you know what needs fixing.

Also Read: Can The IRS See My Bank Account?

#2. Fix The Return As Soon As Possible

The IRS does not care who prepared your return. As far as they’re concerned, you signed it, so it’s yours. That sounds harsh, but it also means you have the power to fix it.

You’ll usually need to file an amended return using Form 1040-X. 

This corrects the false information and replaces it with accurate numbers. 

Doing this early shows good faith and can seriously reduce penalties and interest.

If fixing the return means you owe more money, pay as much as you can right away. Even partial payment helps. It lowers interest and sends a strong signal that you’re trying to make things right, not dodge responsibility.

Dragging this out almost always makes things worse. Speed here is your friend.

#3. Stop Using That Preparer

Once dishonesty enters the picture, the relationship is done. 

Don’t let them “handle it” or “smooth things over.” That often turns into more mistakes layered on top of the first ones.

Cut ties cleanly and gather everything connected to your return. Emails, invoices, engagement letters, text messages, drafts, and any notes showing what you actually provided versus what they filed. 

This documentation can protect you later.

If you need help fixing the return, find a CPA, enrolled agent, or tax attorney who has no connection to the original preparer. Fresh eyes matter.

Also Read: What Happens If A Form 8300 Is Filed On You?

#4. Report The Tax Preparer

If your preparer knowingly lied, altered numbers without your consent, or added information you never approved, reporting them is the right move. 

It protects other taxpayers and helps establish that you were not the one driving the misconduct.

The IRS uses Form 14157 to accept complaints against tax preparers. If they changed your return without your permission, there’s an additional form specifically for that situation.

This step does not automatically trigger an audit. In many cases, it actually strengthens your position if the IRS reviews the return later. 

It shows you identified the issue and took action instead of ignoring it.

#5. Respond Properly If The IRS Contacts You

If the IRS sends a letter, do not ignore it and do not panic. 

These letters usually ask for clarification or documentation. Read it carefully, note the deadline, and respond on time.

Keep your response factual and calm. Stick to documents and corrections. Avoid emotional explanations or long stories about how betrayed you feel. The IRS is focused on numbers and compliance, not feelings.

If the issue involves a large dollar amount, penalties, or an audit notice, this is the point where professional help becomes very valuable. 

Having someone who understands IRS procedures can take a lot of pressure off your shoulders.

#6. Know Your Legal And Financial Exposure

The good news is that intent matters. 

If you did not knowingly participate in the false information and you corrected it quickly, penalties can often be reduced or removed entirely. 

Interest may still apply, but that’s manageable.

Problems escalate when the IRS believes the taxpayer was involved in the lie. That’s why documentation, amended returns, and reporting the preparer all matter. They help separate your actions from the preparer’s misconduct.

In some cases, you may also have grounds to pursue the preparer for damages, especially if their actions caused penalties or fees. 

State licensing boards and civil claims are options, depending on how severe the situation is.

Also Read: What Happens If I Receive A 1099 NEC?

What NOT To Do

When stress hits, it’s easy to make things worse without realizing it. Try to avoid these common mistakes a lot of Virginia residents make:

• Ignoring IRS letters or missing response deadlines
  
• Letting the same preparer refile or “fix” the return
  
• Filing another tax return without correcting the bad one
  
• Assuming the issue will disappear on its own

Silence and delay almost always work against you in tax situations.

Bottom line

If your tax preparer lied on your taxes, you need to take action fast. Confirm what’s wrong, correct the return, cut ties with the preparer, and document everything. 

Most people who handle this early avoid the worst outcomes and move on with their lives.

This feels overwhelming at first, but it’s fixable. 

One step at a time, one form at a time, and you’ll get through it without letting someone else’s mistake follow you for years.

FAQs

Can My Tax Preparer Steal Some Of My Refund?

Yes, it can happen. Some dishonest preparers divert refunds by changing the direct deposit information, routing the money through their own accounts, or charging inflated “fees” that quietly eat into your refund. 

Others convince clients to use refund advance products and skim money off the top.

Can I Sue My Tax Preparer For Not Filing My Taxes?

In many cases, yes. If you paid a tax preparer to file your return and they failed to do so, especially if it led to penalties, interest, or legal trouble, you may have grounds for a lawsuit. 

This often falls under negligence or breach of contract.

What Happens When You Report A Tax Preparer To The IRS?

When you report a tax preparer, the IRS reviews the complaint and looks for patterns of misconduct. If multiple people report the same preparer, that raises red flags fast. 

The IRS may investigate, fine them, suspend them, or permanently bar them from preparing tax returns.

For you personally, reporting them does not automatically mean you’ll be audited.