(WEHT) Tax season is upon us and while that may sound scary, dealing with a ghost tax preparer can be scary.
Ghost tax preparers are individuals who pose as trusted tax professionals, but mislead taxpayers to unknowingly commit tax fraud. Often, ghost preparers promise a big refund or charge fees based on the percentage of an inflated refund, by claiming fake deductions or filing false information – all so they make a quick profit.
How does it work? A ghost tax preparer completes a tax return with false or inflated information, then refuses to sign it electronically or manually using their required Internal Revenue Service (IRS) issued Preparer Tax Identification Number (PTIN). By doing so, the return appears to be prepared by the taxpayer themselves, in order to keep the ghost preparer under the radar.
Ghost preparers often:
- Require payment in cash only and refuse to provide a receipt in order to leave little to no paper trail.
- Claim fake deductions or invent income that qualifies their clients for tax credits in an effort to boost the refund amount.
- Deposit the client’s tax refund into their own bank account.
The Department of Revenue offers tips for individuals to consider when choosing a tax preparer:
- Ask for the tax preparer’s qualifications. The tax preparer must have an up-to-date IRS PTIN to charge for preparing tax returns.
- Do the research. Customers can find more information through the IRS’ Directory of Federal Tax Return Preparers with Credentials and Select Qualifications located on their website.
- Check their history. The Better Business Bureau, State Board of Accountancy and State Bar Association are great options to access the tax preparer’s history.
Additional tips on choosing a tax preparer can be found on DOR’s website.
(This story was originally published on Feb. 25, 2020)