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25.1.11.9
(01-09-2008)
Case Evidence
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Original documents are the best evidence. Always strive to view or obtain original documents. If you have any doubts about
the authenticity of a document, you should firmly request that the original be produced.
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Never write on or alter original documents in any way. Work papers are secondary evidence. Make a copy to use if you want to make
notes on the face of the document.
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Documents and correspondence obtained from the taxpayer or other third parties should be retained as potential evidence.
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The following is a listing of some examples of possible fraud indicators; however, this list is not to be considered all inclusive:
Suspicious or unusual patterns on tax returns:
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Identical names on different returns
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Numerous or similar post office box addresses
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Suspicious looking or similar hand written documents
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Similarities on multiple returns, e.g., refund amount, withholding amount, credits, losses, dependents, etc.
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Often mail includes several returns in the same envelope
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Excessive withholding in comparison to wages
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Typewritten
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Inconsistent typing format
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"Applied for"
annotated in lieu of EIN
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EIN/company name mismatch
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Computerized W-2s in different format
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Erasures or white outs
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Substitute W-2
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Sloppy typing
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Upper and lower case typing
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Missing information such as EIN, SSN, FICA, address, State EIN, etc.
Inconsistent 1040 Income and Deductions:
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Questionable dependent information, e.g., relationship, dates of birth, dates of death
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Occupation in relation to income
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Refund amounts
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Age and income inconsistencies
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Excessive itemized deductions (50% or more) in comparison to AGI
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Unusual deductions for the taxpayer's occupation
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Multiple returns with similar deductions
Schedule C Discrepancies:
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Business income with little or no expenses
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Unreported self-employment tax
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EITC claimed
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Multiple returns with similar characteristics
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Unrealistic occupation
Questionable Amended Returns:
Unscrupulous Return Preparer Patterns:
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Same/similar deductions, credits, expenses, etc., on multiple returns causing refunds, including the following:
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Same filing status (IMF)
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Same occupation (IMF)
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Same child care provider (IMF)
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Excessive deductions/losses
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Different businesses at the same address
Note:
the above indicators should be seen on a number of returns prepared by the same representative in order to effectively establish
a pattern
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