If someone you pay to do your income taxes isn’t willing to sign and file the return, you may be dealing with what the Internal Revenue Service (IRS) warns is an unscrupulous “ghost” preparer who's looking to cheat you.
Ghost preparers, the IRS says in a news release, “look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. These scammers hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return.” Other telltale signs that you’re a victim of a ghost include:
- The preparer only accepts cash for the preparation fee and does not give a receipt.
- The preparer invents income to qualify clients for tax credits they aren't entitled to or claims fake deductions to boost tax refunds.
- The preparer directs tax refunds to his or her own bank account rather than to the taxpayer’s account.
The first step for not getting “ghosted” is to be careful when choosing someone to prepare your taxes. IRS spokeswoman Cecilia Barreda urges people to “avoid fly-by-night operations. Right now we’re in the midst of tax season, and we want everybody to take proper steps to select a credentialed and legitimate tax preparer,” she says.
A ghost could be somebody who addresses a group of people and offers to prepare tax returns for a small fee, according to an IRS spokesman. Or it could be somebody who puts up a shingle during tax season, then vanishes and isn't around to stand by his or her work. “Be careful of somebody who promises you a big refund without knowing your entire situation,” the spokesman says. And “be careful of somebody who says, ‘Don’t contact the IRS. We’ll take care of it without you having to do that.’ “
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One way to check if the preparer you’ve hired is legitimate is to ask to see a valid 2019 preparer tax identification number (PTIN) and to make sure the preparer signs your return and includes that number. For e-filed returns, make sure the preparer is willing to sign before he or she files it digitally.
Be sure to review your completed returns carefully before signing them — and ask questions if something is not clear, the IRS says. And if you’re expecting a tax refund via direct deposit, check to make sure your bank’s routing number and your account numbers are correct.
If you need help, the IRS offers tips on choosing a tax professional and understanding his or her credentials and qualifications. The agency also maintains a directory of federal tax-return preparers with special credentials and qualifications. You can search the database by zip code.