At the end of the second week of the 2019 tax season, the Internal Revenue Service agency warned taxpayers to avoid unethical tax preparers, known as “ghost” preparers.
By law, anyone who is paid to prepare or help prepare federal tax returns must have a valid 2019 Preparer Tax Identification Number or PTIN. Paid preparers must sign the statement and include their PTIN.
The “ghost” preparers do not sign the statement; they print it and ask the taxpayer to sign it and mail it to the IRS. For statements filed electronically, they prepare them, but they do not sign them digitally as the paid preparer.
According to the IRS, similar to other tax preparation schemes, “ghost” preparers are dishonest and unscrupulous and seek to make quick money by promising a large refund or by charging fees based on a percentage of the refund. They hurt honest taxpayers who try to do the right thing and file a legitimate tax return.
The “ghost” trainers can also:
• Require payment in cash and do not provide a receipt.
• Invent revenue to erroneously qualify customers for tax credits or claim false deductions to allow the taxpayer to obtain a larger refund.
• Direct refunds to your own bank accounts instead of the customer’s account.
The IRS urges taxpayers to carefully review their tax return before signing, and ask questions if something is unclear. And for any refund with direct deposit, taxpayers must make sure that both the routing number and the bank account number included in the tax return are correct.
The IRS offers tips to help taxpayers choose a tax preparer. The page how to choose a tax preparer (in English), has information of credentials and qualifications of the preparers. The IRS Directory of Federal Tax Preparers with Selected Credentials and Qualifications helps find many preparers by type of credential or qualification.
Taxpayers can file complaints of abusive preparers with the IRS. Use Form 14157, Complaints: Tax Preparers (in English). If a taxpayer suspects that a preparer filed or changed the information on his return without his consent, he must file Form 14157-A, Malpractice Affidavit or Preparer’s Fraud (in English).
