Saturday February 22, 2020
IRS Cautions - Avoid "Ghost" Tax Preparers
As taxpayers gather their W-2s, Forms 1099, charitable gift receipts and other financial information, tax filing season is now in full gear. In IR-2019-9, the IRS cautioned taxpayers not to use tax preparers who refuse to sign the taxpayer's return. These individuals are called "ghost" preparers, because their names are not on the tax returns.
The IRS requires each paid preparer to have a 2019 Preparer Tax Identification Number (PTIN). The paid preparer includes his or her PTIN and signs the tax return. For e-filed returns, the paid preparer may use a digital signature.
Ghost preparers often violate many rules and ethical practices. Preparers may promise an oversized refund or charge a fee based on a percentage of the refund. Some will increase a taxpayer's income in order to qualify for the earned income tax credit (EITC) or create false deductions to lower taxes.
The IRS urges taxpayers to be certain the refund is directed to the taxpayer's bank account and not to the preparer's account. If the refund is sent to the tax preparer's account, both the preparer and the refund may disappear.
The "Choosing a Tax Professional" page on www.IRS.gov explains the proper tax preparer credentials and qualifications. Many tax preparers are also listed on the IRS' "Directory of Federal Tax Return Preparers with Credentials and Select Qualifications."
Published February 8, 2019