Tax season is scary enough without having to worry about a ghost preparer taking off with your refund.
A ghost tax preparer claims that they can get you a big tax refund but instead files a fraudulent return, takes your money and possibly steals your identity. Experts warn that a ghost tax preparer will then likely disappear, leaving you on the hook to deal with the consequences of filing a false tax return.
“Unfortunately, promising large tax refunds often means ‘creative accounting,'” Ashley Morgan, a debt and bankruptcy attorney and founder of Ashley F. Morgan Law, said in an email. “We regularly see people who are audited for deductions about two years after the refund has been given.”
The Internal Revenue Service estimated that $9.1 billion worth of tax fraud and financial crimes were committed in 2024. There isn’t an exact count of how many were committed by ghost tax preparers, but they’re a big enough problem that the IRS and individual state agencies routinely warn taxpayers about them.
Here’s how they work and how to avoid them.
File your tax return with one of CNET’s tax partners.
How a ghost preparer scam works
A ghost tax preparer is someone who prepares your tax return on your behalf but never signs it. Ghost preparer tax scams can vary, but they usually go something like this.
The ghost preparer might entice you to work with them by listing fake deductions and credits on your return to make your refund look bigger than it really is. Many charge you a percentage of your expected refund, so the larger your refund looks, the more they get paid. Once your tax return is filled out, the ghost preparer will ask you to submit it to the IRS. After you file, the ghost preparer might even take off with your refund, then disappear.
When the IRS starts investigating, the ghost preparer is gone and you’re left responsible for any errors or fraudulent activity. You’ll likely have to pay back the refund — even if your preparer stole your refund — plus interest and penalties. As a final insult, since you gave the preparer your personal and financial information to file the return, they can also use that information to steal your identity.
Read more: These 6 Tax Mistakes Could Get You Audited by the IRS
How to avoid a ghost tax preparer
So how do you make sure your tax preparer is legit and not a con artist?
Be wary of unsolicited tax services
You might get a text or an email from a so-called tax preparer promising really affordable rates, or they may assure you that because they know all of the tax tricks of the trade, you’ll get a big refund. Be suspicious of anyone who promises they can get you a bigger refund than their competitor or who claims to know “secret” ways to get you a bigger refund.
Ask for recommendations
Ask your friends and family which professional tax preparer they use. A trusted tax preparer who’s been doing their taxes for years is likely a safe bet.
Do your homework
Searching for the tax preparer online isn’t a foolproof way to discover if they’re on the up and up, but it’s a start. If the service only operates online and doesn’t list a business address or telephone number on its website, that’s a red flag.
Next, ask about the service’s pricing structure. If fees are based on a percentage of your refund or they’re a cash-only business, that’s another red flag, says the IRS. Tax accountants should charge a flat or hourly rate and provide receipts for their services.
And don’t forget to ask for a list of previous clients who can offer referrals. Contact the clients to ask them about their experience, including the accuracy of their returns.
Ask for a PTIN
Ask the accountant for their Preparer Tax Identification Number, which you can verify with the IRS. If they can’t provide one, don’t use them. It’s against the law to get paid for preparing taxes without a PTIN.
Review your return before filing
Regardless of who fills out your return, you should review your forms carefully before signing and ask for a copy of your return. Check all information for accuracy and ask your preparer for clarification on anything you don’t understand. If your refund is directly deposited into your bank account, also make sure the account and routing numbers are correct.
Finally, make sure your tax preparer signs your tax return and includes their contact information on the form. If they avoid signing or leave their information off the return, it’s a red flag, according to Jassen Bowman, an IRS enrolled agent and tax expert.
“If the preparer is insisting that you file a paper return or you see them using a consumer tax return software program like TurboTax or TaxAct, then they are clearly violating IRS regulations,” he said in an email.
What if you fall victim to a ghost tax preparer scam?
Even if your tax return is prepared by a professional, you’re ultimately responsible for the accuracy of your return. The consequences of knowingly filing a false return can be severe. At a minimum, the IRS will force you to pay back the refund, plus interest and penalties. But you could also go to prison for filing a false tax return.
If you realize that you’ve used a ghost tax preparer and your return includes false information, it’s your responsibility to correct the error. You can start by contacting the IRS and the police. To file a complaint about a ghost tax preparation service to the IRS, use Form 14157, return preparer complain. If you suspect the preparer filed a false return in your name, you’ll need to submit Form 14157-A, the IRS tax return preparer fraud or misconduct affidavit, as well.
“If you can convince the IRS that you did not prepare the return, they may waive the penalties and work with the taxpayer on a payment plan,” Morris Armstrong, founder of Armstrong Financial Strategies and an IRS enrolled agent, said in an email.
You’ll also need to contact your local or state tax collector to notify them of any errors on their respective forms.
After you contact the IRS and police, get your taxes done correctly by a reputable tax professional. You’ll need to submit an amended return (Form 1040-X) to correct any errors the ghost preparer made on your original return.
