IRS 2023 Dirty Dozen – Scam #6:  Unscrupulous Tax Return Preparers  (Part B)

IRS 2023 Dirty Dozen – Scam #6:  Unscrupulous Tax Return Preparers  (Part B)

People should be careful of shady tax professionals and watch for common warning signs, including charging a fee based on the size of the refund. Some “ghost” tax preparers refuse to sign the tax return or ask people to sign a blank return. These are all common warning signs, and people should always rely on a trusted tax professional, and the IRS offers a variety of resources to help.

Don’t get ghosted: Avoid shady or self-serving tax professionals

Most tax return preparers provide outstanding and professional service. Unfortunately, there are also some unethical tax preparers that should be avoided at all costs.

A major red flag or bad sign is when the tax preparer is unwilling to sign the dotted line. Avoid these “ghost” preparers, who will prepare a tax return but refuse to sign or include their IRS Preparer Tax Identification Number (PTIN) as required by law.

Not signing the return could mean the preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund. This leaves the taxpayer vulnerable and on the hook for any misinformation on the return. Taxpayers should never sign a blank or incomplete return.

Shady tax preparers may:

  • Ask for a cash only payment without providing a receipt.
  • Invent false income to try to get their clients more tax credits.
  • Claim fake deductions to boost the size of the refund.
  • Direct refunds into their bank account, not the taxpayer’s account.

Taxpayers can report preparer misconduct to the IRS using Form 14157, Complaint: Tax Return Preparer.PDF If a taxpayer suspects a tax return preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct AffidavitPDF.

Next week  #7: Social Media:  Fraudulent Forms Filing and Bad Advice

(IRS Web Site  (TTT 080123)