Beware Ghost Tax Preparers

Tax season is here which means more tax-related scams. The IRS recently published a warning to consumers about a new one involving “ghost” tax preparers. By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number or PTIN. Paid preparers must sign the return and include their PTIN. Ghost preparers are selling their services, not signing the returns, and otherwise engaging in unethical practices. Beware a tax preparer who engages in the following:

• Does not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS. Or, for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.
• Requires payment in cash only and does not provide a receipt.
• Invents income to erroneously qualify their clients for tax credits or claims fake deductions to boost their refunds.
• Directs refunds into their own bank account rather than the taxpayer’s account.

Taxpayers should review their tax return carefully before signing it and ask questions if something is not clear. The IRS advises that for any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.

In addition, both the IRS and New York State provide guidance on hiring a tax preparer. For more information, see:

• Choosing a Tax Professional with information about tax preparer credentials and qualifications.
• The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help identify many preparers by type of credential or qualification.
• Tips for Hiring a Tax Preparer from the New York State Department of Taxation and Finance.

These sites also have information on filing a complaint against a tax preparer.

For information on other tax scams, see the IRS website. In particular, watch out for individuals impersonating IRS officials, in person, on the phone, or by email. Those who owe back taxes may be particularly vulnerable to these criminals.

If you owe money to the government, you should be particularly careful that you work with an experienced tax professional since the wrong advice can make matters worse. Many taxpayers are not aware of the rights and remedies that may be available to them to help them resolve their tax disputes, such as installment payment agreements, offers in compromise, and other remedies. Don’t ignore notices from the IRS. The IRS has a broad arsenal of tools to collect back taxes, including seizing your property and bank accounts, garnishing your wages, and taking your passport. If you owe back taxes, contact Tenenbaum Law for a consultation.