Tax season is upon us and while that may sound scary to many, dealing with a ghost tax preparer is downright frightening. Ghost tax preparers are dishonest individuals who mislead innocent taxpayers to unintentionally commit tax fraud. Often, ghost preparers promise a big refund or charge fees based on the percentage of the refund, by claiming fake deductions or filing false information to make a quick profit.
How does it work? A ghost tax preparer completes a tax return for a customer but will refuse to sign it electronically or manually using their Internal Revenue Service (IRS) issued Preparer Tax Identification Number (PTIN), which is required by law for all paid preparers. By doing so, the return appears to be self-prepared with no indication a paid preparer was used in completing the tax return in order to keep the preparer under the radar.
DOR offers tips for individuals to consider when choosing a tax preparer:
Ask for your tax preparer’s qualifications. The tax preparer must have an up-to-date IRS PTIN to charge for preparing tax returns.
Look them up. Customers can find more information through the IRS’ Directory of Federal Tax Return Preparers with Credentials and Select Qualifications located on their website at https://irs.treasury.gov/rpo/rpo.jsf.
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 at dor.in.gov/4618.htm.