The IRS is warning taxpayers to avoid unethical tax return preparers, known as ‘ghost preparers.’
By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number. Paid preparers must sign the return and include their PTIN.
But ‘ghost’ preparers do not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.
Dishonest and unscrupulous ghost tax return preparers, according to the IRS, look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. Like many tax preparation schemes, these scammers hurt honest taxpayers who are trying to file a legitimate tax return.
Ghost tax return preparers often:
- Require payment in cash only and not provide a receipt
- Invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds
- Direct refunds into their own bank account rather than the taxpayer’s account
The IRS urges taxpayers to review their tax return carefully before signing and ask questions if something is not clear. For any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.
The IRS offers tips to help taxpayers wisely choose a tax return preparer. The Choosing a Tax Professional page has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.
Taxpayers can report abusive tax preparers to the IRS. Use Form 14157, “Complaint: Tax Return Preparer.” If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, he or she should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.