IRS Warns About ‘Ghost’ Tax Preparers — How To Spot One Before It’s Too Late
Written by
Andrew Lisa
Edited by
Jenna Klaverweiden
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
On Feb. 7, 2019, at the end of the second week of filing season, the IRS issued a warning about an emerging scam. Fraudsters posing as tax professionals were preparing and submitting returns on behalf of unsuspecting paying clients without including their signature and Preparer Tax Identification Number (PTIN), as required by law.
Seven years later, these so-called ghost preparers remain in a prominent spot on the IRS’ annual “dirty dozen” tax scams for 2026.
Here’s what you need to know about ghost tax preparers and how to avoid falling victim to one.
How the Scam Works
As outlined by the IRS, the fraud can involve either an unscrupulous tax preparer or an imposter posing as a professional. Either way, ghost preparers charge fees to file tax returns on behalf of their clients, but instead give the “completed” return to clients to sign and file on their own, without including their own signature or PTIN.
They often make bold promises about extra-large refunds, only to overstate income and claim credits for which their victims don’t qualify. They make good on their promise, but keep the falsely inflated refund for themselves, along with the cash fees their clients paid for what they thought was legitimate tax preparation services.
Getting Ghosted: There’s a Lot on the Line
Ghost preparers defraud both taxpayers and the federal government by:
- Gaining detailed access to their victims’ most intimate personal and financial information
- Collecting fees without providing a legitimate service
- Cheating the government by manufacturing inflated refunds
- Keeping the refunds they collect on behalf of victims
- Submitting inaccurate or incomplete returns, which can trigger IRS penalties, tax bills or audits for their already victimized marks.
Know the Signs and Avoid Becoming a Victim
The National Taxpayer Advocate, an official government service, cautioned taxpayers to be alert for the following red flags and warning signs that a ghost preparer could be targeting them:
- Demanding payment as cash upfront
- Failing to provide a receipt
- Guaranteeing unusually large refunds
- Charging fees based on projected refund size
- Inflating income or claiming credits for which you’re not eligible
- Refusing to sign the tax returns they “prepare”
- Requesting to sign blank or incomplete returns
- Listing an account other than yours for direct refund deposits.
More From GoBankingRates
