HOUSTON – If you’re still waiting to file your taxes this year, you may want to consider these potential scams and fraudulent or ‘ghost’ tax preparers.
What is a ‘Ghost’ tax preparer?
A ghost tax preparer is someone you pay to handle your return but who doesn’t sign it. This can raise several issues and potential risks for taxpayers.
According to the IRS, anyone who assists you with your federal tax return must have a valid Preparer Tax Identification Number (PTIN) and must sign your return, including that number.
The IRS also says taxpayers should check for the preparer’s signature on the second page of their 1040 form. If there is no signature or if it says “self-prepared,” it should raise a red flag. Without a signature, tracking down the paid preparer in case of any issues or questions regarding the return could become difficult.
Red flags when filing taxes
Apart from the absence of a signature, there are other red flags to watch out for when it comes to ghost tax preparers. The IRS recommends carefully reviewing the return to ensure that the numbers are accurate. Preparers who invent income or deductions to boost the refund are engaging in fraudulent practices. It’s important to go over the return with them before signing it, as taxpayers are ultimately responsible for the accuracy of the return, even if someone else prepared it.
The IRS also warns against preparers who demand cash payments without providing a receipt. Preparers may also try to direct refunds into their own bank accounts instead of the taxpayer’s account. Before submitting your return, always verify that the preparer has provided the correct routing and bank account numbers for your refund.
Here are some other tips:
- Avoid any preparer who asks to be paid in cash without a receipt.
- Avoid those who base their fees on a percentage of your refund.
- Avoid someone who asks you to invent fake income to qualify for tax credits.
- Avoid anyone who wants to claim fake deductions to boost your refund.
How to check if your tax preparer has the proper credentials
The IRS and the Texas State Board of Public Accountancy are good resources to find out who is a qualified CPA tax professional.
Also, if you know your tax preparer’s last name, you should be able to search for their credentials here.