"They were crying because they had each received a letter from the Internal Revenue Service demanding additional taxes of $3,000," said Geideman, board member of the Sacramento-based California Tax Education Council.

The two personal trainers and one store clerk had been victimized by an Anaheim tax-preparation firm whose staff included illegal tax preparers, Geideman said.

By preparing false tax returns, the outfit had "qualified" the women for tax refunds of about $3,000 each, said Geideman, who prepares taxes in Santa Ana.

First, each woman had paid a $1,200 fee to the company.

"The tax preparers had made up phony numbers" in preparing the returns, Geideman said. "For instance, they put down that each lady had made charitable contributions of $2,600 without justification."

The IRS discovered the fraud after the women had spent their refunds.

"The ladies said they were happy to receive the refunds, but they didn't have the money to pay it back," Geideman said.

In the end, Geideman said, he was unable to help any of the trio because by signing the falsified returns, each had declared under penalty of perjury that the returns were truthful.

"There was nothing I could do," he said. "I pointed out that when you break the law, you have to pay the consequences."

With tax season under way, California Tax Education Council officials last week warned the public to beware of dishonest tax preparers.

Across the state, more than 10,000 people are believed to be preparing income taxes illegally, CTEC officials said in a prepared statement.

The state Legislature established the nonprofit education council to promote competent tax preparation within the state. It has a registry of 30,000 legal tax preparers.

Geideman said any tax preparer who promises a tax refund before "doing the numbers" must be avoided.

Taxpayers must choose carefully when hiring a tax preparer, said Mark Lessler, spokesman for the IRS' Northern California Criminal Investigation Unit.

"No matter who prepares your tax return, you are ultimately responsible for all of the information on it," he said.

"While most preparers provide excellent service, (some) unscrupulous tax preparers file false and fraudulent returns to defraud the government, the tax-paying public and their own clients," Lessler said.

CTEC, which also sets educational standards for tax preparers, issued a list of IRS-backed suggestions for consumers:

* Tax laws change every year. With some exceptions, state law requires that CTEC-registered tax preparers take at least 20 hours of continuing education each year to keep up with the legal changes.

* Taxpayers must also remember that besides CTEC members, three other groups of professionals can also legally collect fees to prepare taxes. They are certified public accountants, "enrolled agents" such as Geideman who have a higher degree of expertise than regular tax preparers, and lawyers.

* Always get a receipt for services performed.

* Avoid tax preparers who charge a percentage of the tax return as their fee.

* Never sign a blank tax form.

The women who were exploited by the Anaheim firm would have received much lower IRS refunds had Geideman prepared their returns.

"For a legal return for each of them, I would have charged $120," Geideman said. Each would then have received a legal refund of more than $100.

-- Edgar Sanchez