Can a tax preparer rip you off?

Not only could a fraudulent tax preparer steal your refund, but they could also use your personal information to obtain government benefits or loans in your name. If you're planning to hire help this tax filing season, be careful who you entrust your sensitive financial information to. Fraudulent tax preparers will try to lure customers by promising them huge refunds. Getting a great return is great, right? Not necessarily.

The way these stores make money is by charging you a percentage of your refund. Therefore, the higher the refund, the more you can be charged. There are a lot of these fraudulent tax preparers, all of whom promise large refunds and prepare customer taxes in a fraudulent manner. Most paid tax return preparers are professional, honest, and trustworthy.

However, the IRS is committed to investigating those who act improperly. Tax preparers should want to see your records and receipts, as well as ask questions about your income and finances. Young children dressed as Lady Liberty or Uncle Sam are parked in front of every mall, with signs that persuade taxpayers to come in and prepare their taxes. On this page you can find an alphabetical list of people who have been prohibited from preparing returns and promoting tax plans.

The IRS urges taxpayers to watch out for any tax preparer who refuses to sign a prepared tax return, as it could result in the taxpayer being held responsible for inaccurate information on the return or a refund being deposited in the wrong account. By law, every tax preparer must have what is called a tax preparer identification number, or PTIN. File your tax return as soon as you have all the necessary documents to avoid scams and make sure you're prepared for this year's tax deadline. In addition, these tax preparers may require payment in cash without a receipt or fill out their bank information instead of taxpayer bank information for the refund of direct deposits, according to the IRS.

Ghost preparers don't sign for their work or include the tax preparer's required tax identification number on a return. When you take your taxes to a professional, you expect to get the peace of mind that comes with proper tax preparation. Last week, the agency released a warning about tax preparers who falsify information, promise greater returns by faking income and adding deductions that you wouldn't normally qualify for, and then refused to sign their work when required on paper or digitally. Tax Debt Tax Obligations, Liens, or Penalties Tax Preparation Business Tax Debt Business Aid Something More.

The IRS maintains a PTIN directory where you can search for a tax preparer using their name and location. This is the most recent scam that unscrupulous tax preparers are committing against their clients, according to an IRS report released last month. The Tax Division reminds taxpayers that the IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost tax preparers,” whose refusal to sign a return should be a Warning sign for taxpayers. Be wary of any tax preparer who brags that they can get a bigger refund than the competition, or someone who promises you a certain refund before reviewing your previous financial documents and tax returns.