Shady Tax Preparer? Red Flags
The preparer promises the biggest refund in town, bases their fee on its size, and asks you to sign blank forms — 'trust me.' Shady preparers inflate returns with fake deductions, pocket the difference, and leave you legally responsible when the IRS comes knocking. You're liable for every number on your return.
TL;DR / Quick Fix
Avoid tax preparers who promise huge refunds, charge fees based on refund size, or ask you to sign blank returns — fraud red flags. Use a preparer with a valid PTIN, get everything in writing, and never sign a return you have not reviewed. You are legally responsible for it.
Follow these steps
- Check for a valid PTIN. Every legitimate paid preparer has an IRS Preparer Tax Identification Number — ask for it and verify. No PTIN, no business.
- Reject refund-based fees. Fees tied to refund size incentivize fraud. Legitimate preparers charge flat or hourly fees — never a cut of your refund.
- Never sign a blank return. A blank signature lets the preparer file anything. Review every line before signing — see what happens when identity theft meets bad filings.
- Get everything in writing. Engagement terms, fees, and who signs as preparer — documented. Ghost preparers who won't sign the return are the biggest red flag.
- Review the return yourself. You don't need to be an expert — read it, question anything unfamiliar, and keep a full copy. It's your legal responsibility.
- Report fraud. Report abusive preparers to the IRS. Your report protects the next client — and may help your own case.
What NOT to do
- Do not choose a preparer on refund size alone. The 'biggest refund' pitch is the fraud pitch — inflated refunds mean inflated risk for you.
- Do not let the preparer deposit your refund into their account. Refunds go to you — split or redirected refunds are a classic skim.
- Do not sign without reading because 'it's standard.' Every number on that return is legally yours, filed under your name.
- Do not use a preparer who won't give you copies. No copy, no accountability — legitimate preparers hand you everything.
Frequently asked questions
What is a ghost preparer?
One who prepares returns for pay but won't sign them or include a PTIN — hiding from IRS oversight. It's a major fraud indicator.
Can I be penalized for my preparer's fraud?
Yes — you're responsible for your return's accuracy even when a preparer filed it. That's why choosing carefully matters.
Are storefront tax shops safe?
Many are legitimate, but the red flags apply everywhere: verify PTIN, flat fees, signed returns, full copies.