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Be informed, not fooled by ghost preparers and tax credit scams

The tax filing season is coming to an end in a couple of weeks, but that doesn’t mean scammers and schemers take a break. Here’s a couple more things from the recently released Dirty Dozen, that taxpayers should be mindful of.

Ghost preparers
 
Taxpayers should choose their tax professional wisely. Paid preparers must sign and include a valid Preparer Tax Identification Number on every tax return. A “ghost” preparer prepares a return but refuses to sign it and/or refuses to include a PTIN. These unlicensed or unethical tax return preparers should be avoided. When a preparer refuses to sign or provide a PTIN, that is a major red flag; the taxpayer is legally responsible for what is filed. Taxpayers should never sign a blank or incomplete return.

Ghost preparers also often exploit credits by promising large refunds. These preparers may:

  • Exaggerate eligibility for deductions
  • Claim credits that taxpayers do not qualify for
  • Disappear after filing, leaving the taxpayer responsible for penalties, interest, or audits

People can make a complaint about a tax return preparer, if a paid preparer filed a fraudulent return, without consent or if they followed improper tax preparation practices.

Phony “Self-Employment Tax Credit” 
 
Another one from the Dirty Dozen is misleading information being shared about a “self-employment tax credit,” which can result in an inaccurate filing. Many taxpayers do not qualify for these credits, and the IRS is closely reviewing claims coming in under this provision, so taxpayers filing claims do so at their own risk. Be informed about any tax credits and eligibility requirements before claiming them. The IRS Interactive Tax Assistant can help a person decide if they're eligible for many popular tax credits and deductions.

Taxpayers are reminded to rely on trusted sources and qualified tax professionals, not bad tax advice on social media. People can confidentially report suspected tax fraud, scams, identity theft, or other tax-related wrongdoing at IRS.gov/submitatip.