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How to Avoid Tax Preparer Scams

Comstock/Thinkstock(NEW YORK) -- For three years, Debbie and Keith Sleight used one of the seasonal office tax preparers to file their taxes. They were newly married, using extra money to send care packages to soldiers overseas. The tax preparers were recommended by friends who had gotten big refunds.

“He had certificates on his walls and you know, I thought what he was doing was right,” Debbie Sleight said.

Then they were hit with an audit. It turns out the government said the couple’s tax preparer had made up several thousand dollars' worth of deductions.

The law says that taxpayers are always responsible for what’s in their tax returns, no matter who fills out the forms. So now, the Sleights owe nearly $16,000 in back taxes and are stuck with monthly payments to both the IRS and the state of Georgia for five years.

The tax preparer, Larry Heath, and his brother are being sued by the government. The two brothers ran two separate businesses, and the IRS says that 94 percent of tax returns the Heath brothers filed over four years when the brothers still worked together “required adjustments” or contained “patently false information.”

It’s the families who have to pay the money back, plus interest, and sometimes penalties too.

ABC News tried to get answers from the brothers, neither of whom are accountants. Larry Heath and his lawyer declined to talk. Andy Heath said he’s “estranged” from his brother and in court papers repeatedly “denies knowingly filing any false returns.”

Authorities are now warning taxpayers everywhere to look out.

“If you go to a tax return preparer and the first thing they start talking about is guaranteeing you a refund, that is something you should be concerned about,” Deputy Assistant Attorney General David Hubbert said.

There are clear red flags, he said. If you’re asked to sign a form before it’s completed or they only show you the bottom line and skip the details, you should get up and walk away.

Copyright 2013 ABC News Radio

ABC News Radio