As people begin preparing their 2025 tax returns, this is a timely reminder to avoid unethical “ghost” tax return preparers. They often promise unusually large refunds, move fast, ask few questions, and then disappear when problems show up. The issue is simple: if someone prepares your return for pay but refuses to sign it, they’re trying to avoid accountability—and you could be the one left paying the price.
What Is a “Ghost” Tax Return Preparer?
A ghost preparer is someone who charges to prepare (or help prepare) a tax return but doesn’t sign it. Unscrupulous ghost preparers often print the return and have the taxpayer sign and mail it to the IRS. For e-filed returns, the ghost preparer may prepare the forms but refuse to digitally sign as the paid preparer.
Why This Is a Big Deal (PTIN + Signature Is the Law)
By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid Preparer Tax Identification Number (PTIN). Paid preparers must sign the return and include their PTIN on it. If a preparer does not sign your return, consider that a major red flag—often a sign the person may be trying to make quick money by promising a big refund or charging fees based on the size of the refund.
Many ghost preparers also require cash payment to avoid paying taxes on their income and to reduce the ability to trace them.
How Ghost Preparers Attract Clients: The “Big Refund” Trap
Ghost preparers often lure clients by fabricating tax deductions and credits to generate unusually large refunds. When the refund looks impressive, clients spread the word, attracting others. But the refund is often inflated using false claims—and once the IRS corrects the return, the preparer is nowhere to be found.
Common Fabricated Tax Benefits Used to Inflate Refunds
Here are some of the fabricated tax benefits ghost preparers commonly use:
- Manipulating income/expenses to maximize Earned Income Tax Credit (EITC) by inventing business income or adjusting expenses to increase the credit.
- Fake charitable deductions to boost the refund amount.
- Off-road fuel credits claimed improperly.
- Invented income to qualify a taxpayer for credits they otherwise wouldn’t receive.
- Fraudulent home energy credits.
- Fraudulent education credits.
- Fake deductions of various kinds to inflate the refund.
How They Hide the Fraud
To reduce the chance of being caught (and to keep the taxpayer in the dark), ghost preparers may:
- File a tax return without letting the taxpayer review it.
- File a tax return without getting the taxpayer’s signature or consent.
- Direct refunds into their bank account, not the taxpayer’s.
The list goes on—and then the preparer vanishes, leaving you holding the bag when the IRS follows up.
When the IRS “Comes Knocking”: What Really Happens
No, the IRS won’t literally come knocking on your door in most cases. But if your return is corrected, you can count on receiving a return correction notice and a bill. Paying back ill-gotten refunds—plus interest and penalties—can empty your pockets for years to come.
Another Hidden Risk: Ghost Preparers Often Lack Training and Insurance
Ghost preparers generally don’t take continuing education, aren’t up to date on tax law changes, and may not know lawful tax-saving strategies. Unlike most professional preparers, they typically do not carry errors and omissions insurance. That means if their work creates a mess, you’re usually on your own.
2025 Is Not the Year to Gamble: Major Law Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) made an abundant number of changes for 2025, providing substantial new tax benefits that taxpayers will not want to miss out on. This is not the year to use a ghost preparer, a novice, or anyone who has not kept up with the law changes.
Key changes taxpayers should watch for in 2025 include:
- Increased Standard Deductions
- Senior Deduction
- No Tax on Tips (actually a limited deduction for tips received, but may be advertised in a misleading way)
- No Tax on Qualified Overtime (there’s a maximum amount of overtime pay that is deductible—not all overtime compensation; watch for misleading ads)
- Vehicle Loan Interest Deduction (has many requirements and limitations—be cautious of ads suggesting everyone qualifies)
- Refundable Adoption Credit
- Increased Child Tax Credit
- Increased SALT Deduction Limit
- Minimum Qualified Business Income (QBI) Deduction
- Expensing Qualified Production Property
- Increased Section 179 Expensing
- Return of Bonus Depreciation
- Super Retirement Catch Up Contributions
- Prepping For Trump Accounts
- And more…
With this many changes, using someone who isn’t accountable—or isn’t current—can cause you to miss legitimate benefits or get pulled into improper claims that trigger IRS action.
How to Protect Yourself Before You Sign
No matter who prepares your return, protect yourself with these practical steps:
- Review your return carefully and ask questions about anything that’s unclear before signing.
- Confirm the preparer signs the return and includes their PTIN.
- Verify routing and bank account numbers for direct deposit refunds.
- Watch for Form 8888, which instructs the IRS to split the refund into multiple bank accounts.
Be especially alert for refund diversion schemes. Some ghost preparers tell clients the refund is less than the actual amount, then have the difference deposited into their own account—often without raising suspicion.
How to Report a Ghost Preparer to the IRS
Taxpayers can report preparer misconduct to the IRS using:
- IRS Form 14157, Complaint: Tax Return Preparer
- IRS Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit (if you suspect a preparer filed or changed your return without your consent)
Final Takeaway: Choose Accountability, Not Shortcuts
Don’t fall victim to a ghost preparer. Trained and trustworthy preparers who sign returns understand the standards they’re held to—and the penalties for violating those standards. Ghost preparers don’t know, or don’t care, and their actions can leave taxpayers facing years of financial and compliance fallout.
If a ghost preparer put you in IRS trouble, contact us—we can help you straighten it out.