Tax season can be stressful enough without worrying about scammers who are looking to take advantage of you. With so many people filing their returns, the IRS warns about a specific group of fraudsters—ghost tax preparers. These scammers can cost you money, your personal information, and even your tax refund. But how can you spot them before it’s too late? Let’s dive into the warning signs and make sure you avoid getting ripped off.
Is your tax preparer refusing to sign your return?
One of the biggest red flags to look out for is if your preparer refuses to sign your tax return. A legitimate tax preparer is required by law to sign your return and include their IRS Preparer Tax Identification Number (PTIN). If they don’t sign, it’s likely a scam. Remember, if the preparer won’t stand behind their work, you could end up facing penalties and audits down the line.
Are they asking for payment based on a percentage of your refund?
If the preparer offers to take a percentage of your refund as their payment, you should be extremely cautious. Legitimate tax preparers typically charge a flat fee or an hourly rate, not a commission. Scammers know that people are eager to get a bigger refund, and they may promise huge refunds to lure you in, but this can lead to inflated returns and fraud.
- Avoid anyone who charges based on the size of your refund.
- Pay attention if they seem more interested in your refund than your actual tax situation.
Is your preparer unprofessional or operating from a temporary office?
Scammers often work out of temporary pop-up offices during tax season or make themselves known through ads in community spaces like social media or local churches. They might be hard to reach once the tax season ends, and their professional presence is questionable. You can usually tell when someone is running a legitimate business with an established office, so trust your gut. If something feels off, do more research or look for another preparer.
Are they pushing you to sign a blank or incomplete form?
Scammers might try to pressure you into signing incomplete or blank forms, telling you they will fill everything out later. NEVER sign anything you do not fully understand. Make sure all the sections are completed, and you know exactly what you are signing. Remember, you are legally responsible for the accuracy of your tax return.
Do they seem too eager to claim deductions or credits?
Watch out if your preparer is suggesting questionable deductions or credits that do not apply to your situation. Some ghost preparers might inflate your deductions or create fake expenses in order to boost your refund. They may also promise credits like the Employee Retention Credit (ERC), which many people don’t qualify for. Be wary of anyone who seems eager to bend the rules to make your refund higher.
Are they trying to steal your refund?
In some extreme cases, scammers can even steal your refund. They may use your personal information to file fraudulent returns and have the refund sent to their bank accounts. Always double-check where your refund is being sent and ensure it’s going to the correct account—your own.
How to protect yourself from tax preparer scams
Stay informed and vigilant this tax season to avoid becoming a victim. Here are a few tips:
- Always verify that your tax preparer has a valid PTIN.
- Never share personal information with anyone who reaches out to you unexpectedly.
- Keep your personal data secure and report any suspicious activity to the IRS.
Your tax return is serious business, and it’s important to protect yourself from fraudsters. Make sure you choose a reputable, trustworthy tax preparer this season.
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