As the April 15 tax deadline approaches, a watchdog agency has issued a warning about ghost preparers.
A ghost preparer is someone who prepares your taxes but fails to actually sign the tax return and “ghosts” you after the fact.
The Taxpayer Advocate Service, a federal watchdog agency, issued an alert saying they can take off with your money and your personal information.
Federal law requires tax preparers to include their Preparer Tax Identification Number (PTIN).
Ghost preparers may leave that off your return because they don’t have a PTIN or they don’t want to be held accountable for inaccurate or fraudulent returns.
That means you could be on the hook for any errors on your tax return.
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“What that means to you is you are there all by yourself,” said Mark Steber, Chief Tax Officer for Jackson Hewitt Tax Service. “So a ghost preparer, bottom line is someone who didn’t acknowledge or accept responsibility for preparing your tax return for a fee.”
You can protect yourself by making sure you see the tax preparer’s ID number and signature on the return.
“You as a taxpayer have the right to get a copy of that tax return,” said Steber. “At Jackson Hewitt, we provide you with an electronic copy. But the point is you have access to a copy, paper or electronic and down at the bottom it has the paid prepare information, the name, the PTIN. So, their information is on your copy and you should always look at your copy.”
Consider it a red flag if you’re tax preparer:
- Only accepts cash and do not provide receipts
- Directs refunds to their own bank account instead of yours
- Invents income or claim fake deductions to increase refund amounts
- Charges a fee based on the size of your refund or guarantee a refund
- Asks you to sign a blank or incomplete return
A tax preparer may share misleading information being shared about a “self-employment tax credit,” which can result in an inaccurate filing.
Many taxpayers do not qualify for these credits, and the IRS is closely reviewing claims coming in under this provision, so taxpayers filing claims do so at their own risk, according to the IRS website.
People can confidentially report suspected tax fraud, scams, identity theft, or other tax-related wrongdoing at IRS.gov/submitatip.
