The IRS is warning taxpayers about potential ghost tax preparers. A ghost tax preparer is someone who prepares the return but does not sign it or even include information that is vital.
From this point the ghost preparer is free to:
- Create income to let their clients become eligible for tax credits
- Claim fake deductions to boost their refund
- Direct the refund into their personal account and not the taxpayers’
- Require cash payments and not provide a receipt
They can get away with this since there is no signature, and it is assumed by the IRS that the return is self-prepared. It is imperative for taxpayers to recognize this scam since the amount of personal information that is involved with a tax return will strongly affect you.
A couple of tips given by the IRS and Arizona Department of Revenue (ADOR) are:
- Ask questions before signing and filing
- Make sure the tax preparer provides you with a copy of the return and all schedules
- Use the “Choosing a Tax Professional” page from IRS.gov
- Double check your routing and banking information on the return
ADOR recommends taxpayers with concerns about their tax preparer report it to the “Report Tax Fraud Hotline” at (602) 542-4023 or at https://azdor.gov/contact-us/report-tax-fraud. The IRS also states that you can report preparer misconduct by using Form 14157, Complaint: Tax Return Preparer.