IRS Warns of “Ghost Preparers”

If you have not yet filed your 2023 income tax return you have until midnight next Monday to do so.

And as that deadline gets closer you may find yourself in a rush to get a tax preparer to do your taxes for you.

But the Internal Revenue Service is warning taxpayers to be on the lookout for unscrupulous tax preparers who could encourage people to file false tax returns and then steal your valuable personal information.

A common problem seen annually during tax season are “ghost preparers.”

These are scammers who pop up to encourage taxpayers to take advantage of tax credits and benefits for which they don’t qualify.

Ghost preparers, trying to make a fast buck, prey on seniors and people in underserved communities, enticing them with bigger refunds by including bogus tax credit claims or making up income or deductions.

And they can charge a large percentage of the refund or even steal the entire tax refund as their “fee.”

After the tax return is prepared, these “ghost preparers” simply disappear, leaving well-meaning taxpayers to deal with the consequences.

Shady tax practitioners can also be involved in stealing taxpayer identities.

Some warning signs to look out for:

Legit paid tax preparers must sign and include a valid Preparer Tax Identification Number (PTIN) on every tax return. A ghost preparer is someone who does not sign the tax returns they prepare.

Taxpayers should always check the tax preparer’s credentials and qualifications to make sure they are capable of assisting with the taxpayer’s needs.

Always ask the tax preparer about service fees and payment options.

Shady tax preparers typically ask for a cash-only payment without providing a receipt.

Taxpayers can report preparer misconduct using Form 14157, Complaint: Tax Return Preparer.

If a taxpayer suspects a preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.

Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary award.