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Beware of 'ghost' tax preparers this tax season, IRS warns

Look out for unsigned tax documents
Tax Form
Posted at 10:33 AM, Feb 10, 2021
and last updated 2021-02-10 10:33:54-05

INDIANAPOLIS — The Internal Revenue Service has issued a warning to avoid “ghost” tax return preparers this tax season.

Ghost tax preparers get their name because they don’t sign tax returns they prepare, according to the IRS.

“Like a ghost, they try to be invisible to the fact they’ve prepared the return and will print the return and get the taxpayer to sign and mail it,” according to the IRS. “For e-filed returns, the ghost preparer will prepare but refuse to digitally sign it as the paid preparer.”

The IRS wants taxpayers to know they are responsible for a valid, accurate tax return even if they hire someone to handle the preparation.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number or PTIN.

Paid preparers must sign and include their PTIN on the return.

If your tax preparer does not sign a return, consider that a red flag, according to the IRS.

Another red flag—if your tax preparer promises a big refund or charges fees based on the size of the refund.

Dishonest tax return preparers may also:

  • Require payment in cash only and not provide a receipt.
  • Invent income to qualify their clients for tax credits.
  • Claim fake deductions to boost the size of the refund.
  • Direct refunds into their bank account, not the taxpayer’s account.

The IRS urges taxpayers to choose a tax return preparer wisely.
“No matter who prepares the return, the IRS urges taxpayers to review it carefully and ask questions about anything not clear before signing,” according to an IRS statement. “Taxpayers should verify both their routing and bank account number on the completed tax return for any direct deposit refund. And taxpayers should watch out for preparers putting their bank account information onto the returns.”

The Choosing a Tax Professional page on IRS.gov 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.

You can report preparer misconduct to the IRS using IRS Form 14157 , Complaint: Tax Return Preparer.

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

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