IRS warns taxpayers of ‘ghost’ tax return preparers

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The official open date for taxpayers to start filing is Monday January 27th, but the IRS is warning to look out for what they call ‘ghost’ tax preparers.

A ‘ghost’ preparer does not sign a tax return they prepare and will print the return and tell the taxpayer to sign and mail it to the IRS.

For e-filed returns, the ghost will prepare but refuse to digitally sign as the paid preparer.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid preparer tax identification number (PTIN).

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

Not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund.

Ghost 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. 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.

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