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TAX ACCOUNTING NEWS

Don't Hire a "Ghost" to Prepare Your Taxes


Sometimes the old adages hold true, especially “If it sounds too good to be true, it probably is”

Hiring a tax preparer without the necessary credentials to sign a tax return on your behalf could be an expensive mistake.
The IRS identifies these dishonest and unscrupulous tax preparers as "ghost" preparers.

Ghost Tax Preparers

A ghost preparer may offer the promise of a huge refund, or perhaps they’ll only charge fees based on a percentage of your refund.  However, they will not sign your return. Their common practice will be to print the return they’ve prepared on your behalf, then have you sign it and mail it to the IRS. For e-filed returns, they will refuse to sign with a digital signature, which acknowledges them as the paid preparer.

The IRS requires by law, that any person who is paid to prepare or assist in preparing a federal tax return have a valid Preparer Tax Identification Number (PTIN), which must be included with their signature on a client’s tax return. Obviously, a scam artist is unlikely to possess the necessary credentials to comply with IRS requirements.

All too often, this type of fraud causes financial harm to honest taxpayers who are simply trying to file legitimate tax returns.

The IRS has identified the following red flags, which may indicate you have engaged a ghost preparer:

  • The preparer requires payment from the client in cash only but will not provide a receipt.
  • The preparer invents income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds.
  • The preparer directs refunds into their own bank account rather than the taxpayer’s account.

How can you protect yourself?

  • Always review your tax return carefully before signing. If something is unclear, ask questions of your preparer.
  • For direct deposit refunds, make sure that the bank routing and account numbers are accurate on the completed tax return.
  • Lastly, choose your tax preparer wisely.

At McGovern & Greene LLP, our tax accountants possess all of the credentials and qualifications necessary to prepare your returns in accordance with IRS legal requirements.

In addition to preparing your current year tax returns, we are also equipped to assist you in revising prior years' returns or filing past due returns. We offer a wide range of services related to numerous types of returns on behalf of both individuals and entities.
Contact us for more information.

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