Halloween is a time for Arizonans to be reminded of “ghost” tax preparers.
A ghost preparer is paid to prepare a tax return, but does not sign it or include necessary information. The Arizona Department of Revenue (ADOR) urges taxpayers to be aware they may be a part of a scam if a preparer won't put their name on the tax return.
By law, anyone who prepares or assists in preparing federal and state tax returns for compensation must have a valid 2019 Preparer Tax Identification Number (PTIN). Paid tax preparers are required to sign the tax returns they prepare on paper and include their PTIN. For electronically filed returns the preparer must list their name and PTIN.
By not providing required information, it may appear the return was self-prepared, which helps keep the ghost tax preparer under the radar. Also, ghost preparers may promise a large refund and charge fees based on a percentage of the refund. Taxpayers need to know that preparers are prohibited from charging a percentage of a taxpayer’s refund as their fee.
The Department of Revenue advises taxpayers that it is important to ask questions and carefully review their tax returns because they are ultimately responsible for what is filed, regardless of who prepared the return.
Tips for taxpayers:
- Ask any questions before signing and filing. Ask the preparer to explain deductions, credits and wages claimed.
- Ensure the tax preparer provides you with a copy of the entire return, including schedules if there are itemized deductions or credits.
- Carefully review the tax return before submitting and ensure numbers are correct and schedules add up to source documents.
- Is the preparer available year-round and will the preparer explain how the return was prepared in the event of an examination by ADOR or the IRS?
- Did the preparer explain charges for services in advance?
ADOR recommends taxpayers with concerns about their tax preparer should report it to the department’s “Report Tax Fraud Hotline” (602) 542-4023 or at https://azdor.gov/contact-us/report-tax-fraud.
In tax year 2018, ADOR’s Criminal Investigations Unit (CIU) stopped more than $2 million from 2,500 fraudulent returns submitted by tax preparers.
Friday, October 25, 2019