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While this story reflects 1 person that has been caught and banned from preparing returns, the IRS has NO provisions to stop this type of arrangement. I have met with clients--unsophisticated as they may be--who knew what the preparer was doing. I was asked to help out when the IRS examined 2009 returns (and yes, the same issues exist w/2010 returns). I have tried to report the preparer (and have supporting documents created by the preparer for bogus deductions). In the past week, the IRS has suggested that I report the person using the tax shelter forms. It took 10-15 calls through the practitioner hot line and nearly 4 months to get that far. Maybe the IRS should temporarily move some of their personnel from the audit group to address frauds of this type. I feel sure more will be collected as these issues are resolved than will be collected from an exam (which may or may not generate revenue).

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