With a week left to go until taxes are due to be filed, the Internal Revenue Service and Better Business Bureau are warning taxpayers to avoid “ghost” tax preparers that take advantage of people who pay someone else to file their taxes for them.
What is a ‘Ghost’ preparer?
Essentially, “ghost” preparers are people who offer tax filing services while they are not certified.
They’ll prepare a return but refuse to sign it or refuse to include a Personal Tax Identification Number, which have been a requirement since 2006.
It’s a red flag for taxpayers, since they then become legally responsible for the return.
Some characteristics of a “ghost” tax preparer may include:
- Exaggerating eligibility for deductions
- Claiming credits that taxpayers do not qualify for
- Disappearing after filing
Tips from the BBB on how to protect yourself
Review the tax preparer’s credentials. Enrolled Agents (EA), Certified Public Accountants (CPA), and tax attorneys are qualified to represent their clients to the IRS on all matters. Other preparers can help you with forms and basic matters but cannot represent you in case of an audit.
Be wary of spectacular promises. If a tax preparer promises you larger refunds than the competition, this is a red flag. Some tax preparers base their fees on the amount of your return and may be likely to use shady tax preparation tactics.
Get referrals from friends and family – and BBB. One of the best ways to find a trustworthy tax preparer is to ask your loved ones for recommendations, and another is to check your Better Business Bureau.