By Lisa Marie McAllister, CPA, EA
HAVE YOU HEARD OF GHOST PREPARERS? With the start of the 2020 tax filing season, the Internal Revenue Service is reminding taxpayers to avoid unethical “ghost” tax return preparers.
WHAT IS A GHOST PREPARER? According to the IRS, a ghost preparer does not sign a tax return they prepare. Ghost preparers 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.
KNOW THE LAW! By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number (PTIN) and 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.
WHAT ELSE SHOULD YOU LOOK OUT FOR TO PROTECT YOURSELF? 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!!