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Avoid "Ghost" Tax Return Preparers

In IR-2021-30, the Internal Revenue Service (IRS) reminded taxpayers to avoid "ghost" tax return preparers. These are tax preparers who will not sign your tax return in an attempt to be invisible. This is an obvious red flag for taxpayers.

Under federal law, any individual who prepares a tax return for others is required to have a valid Preparer Tax Identification Number (PTIN). The paid preparer is required to sign the return and include the PTIN.

Ghost tax return preparers sometimes require payment in cash and do not provide a receipt. They may invent income to qualify individuals for tax credits, claim fake deductions or even direct the refund into their own personal bank account.

If you plan to use a tax preparer, IRS.gov has helpful information on the Choosing a Tax Professional page. There is also an IRS Directory of Federal Tax Return Preparers to help you select a good advisor.

The IRS also warned about a new scam that primarily affects tax professionals. The scam involves an email impersonating the IRS in an effort to steal Electronic Filing Identification Numbers (EFINs) from tax preparers.

IRS Commissioner Chuck Rettig stated, "Phishing scams are the most common tool used by identity thieves to trick tax professionals into disclosing sensitive information, and we often see increased activity during filing season. Tax professionals must remain vigilant. The scammers are very active and very creative."

The fraudulent email claims to be from the IRS and states:

"In order to help protect both you and your clients from unauthorized/fraudulent activities, the IRS requires that you verify all authorized e-filed originators prior to transmitting returns through our system. This that means we need your EFIN (e-file identification number) verification and Driver's license before you e-file."

The bogus email then asks for a copy of the tax professional's EFIN acceptance letter and threatens that he or she will not be able to e-file returns unless this documentation is provided. If a tax professional receives this email, he or she should forward it to phishing@irs.gov and notify the Treasury Inspector General for Tax Administration at TIGTA.gov.

Published February 12, 2021

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