Tax fraud prevention for a business owner is not only about avoiding a dishonest preparer. It is also about building controls that let you independently verify what was filed, what was paid, when the payment cleared, who had access to the tax account, and whether the books agree with the government’s records.
Net Profits Tax & Internal Controls Guide
Tax Fraud Prevention for Business Owners: Payment Controls & Preparer Oversight
Use direct payment verification, preparer controls, IRS online tools, reconciliations, MFA, and documented approvals to reduce the risk of a costly tax surprise.
Last reviewed: September 8, 2026 | Author: Cornelius Frazier, MBA
The Net Profits Bottom Line
Delegating tax preparation is reasonable. Delegating all visibility is not. A business owner should be able to independently confirm return filed → tax liability recorded → payment authorized → payment accepted → bank cleared → IRS account updated → books reconciled.
The Steve Harvey $22 Million Story: The Business Lesson
Steve Harvey has publicly described discovering that he owed roughly $22 million in taxes after learning that tax payments he believed were being handled had not been paid. Harvey has discussed the experience in his own public video and interviews.
The lesson for this article is not to characterize someone else’s conduct beyond what is documented. The lesson is much more useful: a taxpayer can suffer enormous consequences when payment verification and independent oversight are missing.
You can hear Harvey describe the experience in his own words on his official YouTube channel.
Using a Tax Professional Does Not Eliminate Owner Oversight
The IRS warns that taxpayers should choose preparers carefully and review returns before filing. Its current tax preparer misconduct guidance says paid preparers must sign returns they prepare and include a valid PTIN. It also identifies serious misconduct such as failing to remit tax payments, filing without authorization, or failing to remit employment taxes.
For business owners, the practical distinction is:
- Preparation: calculating, documenting, and preparing returns;
- Authorization: deciding what is filed and what money is paid;
- Custody: control over bank accounts and payment credentials;
- Verification: confirming that the government received what was expected;
- Reconciliation: matching the tax account, bank, payroll system, and general ledger.
One person should not invisibly control every stage without review.
1. Vet the Tax Preparer Before Sharing Sensitive Data
- Confirm the preparer has a valid PTIN when required.
- Understand the preparer’s credentials and scope of practice.
- Ask who actually prepares and reviews the return.
- Get the engagement terms in writing.
- Know how documents will be stored and transmitted.
- Do not sign a blank or incomplete return.
- Review the final return before authorizing filing.
- Make sure you receive a complete copy of the filed return and filing acknowledgment.
The IRS again warned taxpayers about ghost preparers in 2026: paid preparers who refuse to sign or provide a PTIN are a major red flag.
2. Control How Tax Payments Leave the Business
Whenever practical, the owner or an authorized internal employee should initiate or approve tax payments through official government channels rather than simply sending money to a preparer and assuming it reached the government.
| Control | Why It Matters | Evidence to Keep |
|---|---|---|
| Direct government payment | Reduces ambiguity about where funds went. | Confirmation number and bank record. |
| Two-person approval | Helps catch wrong amounts, accounts, and suspicious changes. | Approval log or workflow history. |
| Bank reconciliation | Confirms the payment actually cleared. | Monthly reconciliation. |
| Tax-account verification | Confirms the IRS posted the payment. | Account history or transcript. |
| General-ledger reconciliation | Makes sure tax liabilities and payments agree with the books. | Ledger detail and financial statements. |
3. Verify Payments Through IRS Business Tax Account
The IRS has expanded Business Tax Account capabilities in 2026. Eligible businesses can use the system to manage tax information, and available features now include items such as:
- viewing recently processed payments;
- viewing certain digital notices;
- making or scheduling eligible payments;
- viewing and downloading certain transcripts;
- requesting a tax compliance check;
- viewing business name and address information on file;
- managing authorized account access for eligible entities.
The IRS also offers Direct Pay for businesses for supported payment types and continues to support EFTPS for business tax payments.
A confirmation email is useful. An IRS account record plus a cleared bank transaction is stronger.
4. Treat Payroll Taxes as a High-Control Process
Payroll taxes deserve special attention because the business may be withholding money from employees and has recurring federal deposit and filing obligations.
The IRS says federal tax deposits generally must be made electronically. A strong payroll-tax workflow should include:
- approved payroll register;
- documented tax calculation;
- electronic deposit through an authorized method;
- payment confirmation;
- bank-clearing verification;
- quarterly return reconciliation;
- general-ledger reconciliation;
- review of IRS notices and account history.
If a payroll provider or tax professional makes deposits for you, that is a convenience—not a reason to stop reviewing the account.
5. Protect Tax Credentials, Payroll Data, and Payment Changes
Tax fraud prevention also requires cybersecurity controls because tax returns, payroll files, EIN records, W-2 data, banking details, and identity documents are valuable targets.
- Require MFA on banking, payroll, accounting, tax, and email accounts.
- Use unique passwords stored in a secure password manager.
- Do not approve bank-account changes from an email message alone.
- Call a known contact using a trusted phone number to verify unusual requests.
- Limit user permissions to what each employee or outside professional needs.
- Remove access immediately when a relationship ends.
- Use a documented offboarding checklist.
Monthly Tax-Control Checklist for Business Owners
- ☐ Reconcile all operating and payroll bank accounts.
- ☐ Review payroll tax liability accounts in the general ledger.
- ☐ Match tax payments to bank withdrawals and official confirmations.
- ☐ Review IRS Business Tax Account or other official tax records when available.
- ☐ Investigate old tax liabilities that have not cleared.
- ☐ Review notices received from federal and state agencies.
- ☐ Check preparer, payroll, and bookkeeping user access.
- ☐ Review unusual journal entries affecting tax liabilities.
- ☐ Confirm upcoming estimated-tax, payroll-tax, and filing deadlines.
- ☐ Save copies of filed returns and acknowledgments in a controlled document system.
Accounting tools that can support the control system
QuickBooks can support reconciliations and tax-liability tracking when the books are maintained correctly. 
1Password can support controlled credential sharing. 
Gusto may fit businesses that want an integrated payroll workflow. Software does not eliminate the owner’s responsibility to review filings, deposits, settings, and account activity.
Affiliate disclosure
Net Profits may earn a commission if you use a qualifying partner link. Partner tools are optional and should be evaluated based on your business needs and current terms.
What to Do If a Tax Payment or Filing Looks Wrong
- Do not ignore the discrepancy. Determine whether it is a timing issue, posting issue, bookkeeping error, missed payment, or misconduct.
- Save the evidence. Keep bank statements, confirmations, emails, engagement letters, returns, notices, and access logs.
- Verify directly with the tax agency. Use official IRS or state channels rather than relying only on the person who originally handled the transaction.
- Correct the books. Do not leave a false tax-payment entry in accounting just because someone expected the payment to occur.
- Get qualified help. A CPA, EA, tax attorney, payroll specialist, or other professional may be appropriate depending on the issue.
- Report misconduct where appropriate. The IRS provides a process for reporting return-preparer fraud or misconduct, including Form 14157.
Cornelius’ Take
Trust is not an internal control. You can trust a professional and still verify the payment. In fact, a good professional should expect the owner to keep copies, review filings, and independently confirm major tax transactions.
Practical Next Step
Pick the last major tax payment your business made. Trace it from the tax return or liability calculation to the payment confirmation, bank statement, IRS account history, and general ledger. If you cannot complete the trail, fix the process before the next deadline.
Frequently Asked Questions
Should I send tax money to my preparer so they can pay the IRS?
Payment arrangements vary, but business owners should understand exactly where funds are going and retain independent evidence that the tax agency received the payment. Direct official payment channels can provide stronger visibility where appropriate.
How do I know if a tax preparer is a ghost preparer?
A paid preparer who refuses to sign the return or provide a valid PTIN is a major red flag according to the IRS.
Can I see business tax payments online?
Eligible businesses can use IRS Business Tax Account features to view certain payments and tax information. Availability depends on entity type and account permissions.
Does using payroll software guarantee payroll taxes are correct?
No. Software can automate calculations and filings, but the business should still review employee data, payroll registers, tax settings, deposits, notices, and reconciliations.
What should I do if I suspect preparer misconduct?
Gather your records, verify your tax account directly, seek qualified tax or legal advice where appropriate, and review the IRS process for reporting a tax return preparer.
Need cleaner tax and accounting controls?
Build a monthly close that verifies what actually happened.
Net Profits Consulting helps small businesses improve bookkeeping, reconciliations, reporting, payroll workflows, tax readiness, and internal controls.
Related Net Profits guides: Proactive Tax Planning · Payroll Automation · QuickBooks for Small Business · Financial Readiness Checklist.
About the author
Cornelius Frazier, MBA is a business consultant, operations strategist, Certified Business Educator, and founder of Net Profits Consulting.
Educational disclaimer: This article provides general educational information and is not individualized tax, legal, accounting, or financial advice. Tax obligations and available IRS account features vary by taxpayer and entity type.
