As tax season ramps up, “ghost preparers” are busy scamming taxpayers. Ghost preparers are unethical tax return preparers that prey on people not through intimidation, but through trust. Federal law states anyone who prepares or assists in preparing federal tax returns for compensation must have a valid 2019 Preparer Tax Identification Number (PTIN) before preparing returns.
Signs you may be dealing with a ghost preparer:
They are not in the free IRS Look up at https://irs.treasury.gov/rpo/ .
They won’t sign the return (by hand or digitally) nor include their PTIN.
They promise you bigger tax refunds before looking at your records.
They ask you to sign a blank tax return or designate their bank for direct deposit refunds.
They require payment in cash and not provide a receipt.
They artificially create income or claim fake deductions to increase refunds.
Dealing with an unscrupulous tax preparer can have far reaching effects. A tax return includes very personal information about the taxpayer and the residual impact can last long past tax season and may easily result in identity theft.
Checking the tax preparer’s PTIN is a good start however the IRS encourages asking preparers about their training, continuing education and professional license. Enrolled Agents (EA), Certified Public Accountants (CPA) and Tax Attorneys have all received substantial proficiency requirements can represent you regarding audits, collections and appeals. In general, if a preparer is not found in the IRS directory, they can’t represent you before the IRS if problems exist after the return is filed.
Problems with the PTIN directory. A recent search tax pros with valid PTINs were not in the lookup directory. A call to an IRS supervisor revealed the website is not current and making a freedom of information act request would provide a current list. Determining if the IRS had ever sanctioned a CPA, EA or Tax Attorney involves reviewing thousands of pages dating back to 1998. Verifying state records is equally cumbersome.
Every year, ghost preparers become bolder and more convincing. Seeking help from a valid tax professional is a great investment. Local Certified Public Accountants, Enrolled Agents and Tax Attorneys are ready to prepare and file accurate tax returns assuring you don’t pay one penny more than necessary under the Tax Cuts & Jobs Act commonly known as the Tax Reform Bill. Choose wisely.