How to Spot and Avoid Tax Preparation Scams

Tax season can be a busy time, but it’s important to stay aware of potential scams. Some fraudulent tax preparers might overcharge, misuse your information, or make mistakes on your return. By knowing how to recognize and avoid these scams, you can ensure your tax season goes smoothly and securely.
Common Tax Preparation Scams
Ghost Preparers
A “ghost preparer” is someone who charges for tax preparation but refuses to sign the return. They often promise large refunds but disappear when issues arise, leaving you responsible for any errors or fraudulent activity. Without a signature, the IRS won’t be able to track the preparer if problems occur.
Inflated Refund Promises
Be wary of preparers who guarantee huge refunds before reviewing your financial information. These scams often involve fraudulent claims, such as exaggerated deductions or false credits. This could lead to audits or penalties.
Excessive Fees
Some preparers charge unreasonably high fees, sometimes based on the size of your refund. A legitimate tax preparer will disclose their pricing upfront and will not tie fees directly to the size of your refund. Transparency is key to protecting yourself from being overcharged.
Phishing for Personal Information
Scammers posing as tax preparers may ask for sensitive information, such as your Social Security number, bank details, or financial history. These requests are often part of a scheme to steal your identity and commit fraud, so never share personal information without confirming the legitimacy of the request.
How to Protect Yourself
Verify Credentials
Ensure your tax preparer is qualified and registered with the IRS. Look for a valid Preparer Tax Identification Number (PTIN), which is required for anyone who charges a fee for preparing taxes. If they don’t have a PTIN, consider that a red flag.
Review Your Return
Never sign a blank return or one filled with unfamiliar information. Always review your return carefully to ensure it’s accurate and honest. If something doesn’t seem right, ask for clarification before you sign.
Use Trusted Services
Stick to reputable organizations like CA$H Maine, which offers free, IRS-certified tax preparation services. Programs like these are reliable, transparent, and have your best interests at heart.
Keep Your Information Secure
Only share sensitive information with trusted professionals. Be cautious if anyone requests your financial details via phone, email, or text without proper verification. Authentic tax preparers should not ask for this information unless they are preparing your return.
Research and Ask Questions
Don’t hesitate to ask your preparer about their qualifications, experience, and fees. Look for online reviews or ask for referrals from friends and family to ensure you’re choosing a reputable provider.
What to Do If You Suspect a Scam
If you suspect a tax preparer is fraudulent or you believe you’ve been the victim of a scam, it’s important to take action right away:
- Report the preparer to the IRS using Form 14157.
- Contact your local law enforcement agency if you suspect identity theft or fraud.
- Place a fraud alert on your credit report by contacting one of the major credit bureaus.
Trustworthy Tax Prep Starts Here
Tax season doesn’t have to be risky. By staying informed and vigilant, you can avoid scams and ensure your taxes are prepared safely and accurately. For trusted tax preparation, consider working with programs like CA$H Maine, where IRS-certified volunteers provide free and secure assistance.
Remember, your financial security is worth protecting—choose your tax preparer wisely.