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Is Your Income Tax Return Preparer Regulated?

Are you behind in filing your income tax or payroll tax returns? Do you have one or more years of unfiled tax returns? If so, be careful who you choose to help you get caught up.

The IRS wants to start regulating paid tax preparers used by more than half the nation's taxpayers in an effort to reduce fraud and errors. IRS Commissioner Doug Schulman recently discussed the fact that new rules could require education and training as well as licensing for people who get paid to prepare returns.

From 2006 through 2008, the IRS initiated more than 600 investigations of fraud among tax preparers. During that time, 356 tax preparers were convicted, with more than 80 percent of them sentenced to prison, home confinement or electronic monitoring.

But when the IRS detects a fraudulent return, it's the taxpayer – not the tax preparer – who must pay the additional taxes, interest and any penalties, according to the IRS.

So, check out the credentials of anyone you are considering hiring to help you prepare back tax returns or even current unfiled tax returns.