Unscrupulous Tax Preparers

Most tax professionals provide honest, high-quality service, but dishonest preparers show up every filing season to commit fraud and harm innocent taxpayers or convince taxpayers to do illegal things they later regret.

Taxpayers should avoid so-called “ghost” preparers who expose their clients to potentially serious filing errors, as well as potential tax fraud and risk of losing their refunds. With many tax professionals affected by COVID-19 and its potentially closed offices, taxpayers should take special care when selecting a reliable tax preparer.

Ghost preparers don’t sign the tax returns they prepare. They can print the tax return and tell the taxpayer to sign and mail it to the IRS. For electronically filed returns, the ghost preparer will prepare it, but will not digitally sign it as a paid preparer. By law, anyone who is paid to prepare or who helps prepare federal tax returns must have a Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN in returns.

Unscrupulous preparers can also contact those without a filing requirement and who may or may not receive a refund. Promise inflated refunds by claiming fake tax credits, including educational credits, the Earned Income Tax Credit (EITC), and others. Taxpayers should avoid preparers who ask them to sign a blank return, promise a large refund before looking at the taxpayer’s files, or charge fees based on a percentage of the refund.

Taxpayers are ultimately responsible for the accuracy of their tax return, regardless of who prepares it.