Ghost Preparers

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Disclaimer:

The view expressed in this article is the opinion of the writer and is not tax advice. Tax law is always subject to change. This article is for information purposes only. Always consult a qualified tax professional for advice on tax planning and strategies.

What is a ghost preparer? Well, the IRS’ definition states…

“For purposes of this IRM 25.20.2, a ghost preparer is a compensated tax return preparer who does not comply with the PTIN requirements in IRC 6109 and Treasury Regulation 1.6109-2. On returns they prepare; a ghost preparer will:

• Fail to include any identifying number,
• In place of their PTIN, include a number that is not their PTIN, such as:
  • Series of random numbers,
  • SSN,
  • EIN,
  • Site Identification Number,
  • PTIN issued to another preparer,
  • Made-up PTIN, or
  • PTIN issued under the IRS’s discontinued PTIN issuance system (a.k.a. a legacy PTIN).”

So why does this matter? Well for a couple of reasons. One, if your return was prepared by a “Ghost Preparer” and they do not sign their name to your return then the liability for the information on the return, whether correct or incorrect, falls completely on you. Plus, anyone else on the return.  Secondly, besides wreaking havoc in people’s lives they are also messing with the tax system and causing the IRS to spend resources investing you and your taxes.

Ghost preparers are not good for true tax businesses because they violate tax codes to give bigger payouts that are illegal. This in turn makes trained tax preparers look like they do not know what they are doing and give them a reputation for not knowing how to prepare tax returns efficiently. It is very important to make sure that the tax preparer signs each required location on your return. There are also other forms that may need to be signed if a tax return is altered or amended.

Ghost preparers should be reported to the Internal Revenue Service as they can do major damage to your finances, accuracy and auditability. The 8879 can allow the preparer to digitally sign the 1040 return by a unique pin instead of a wet signature. You also can sign digitally by signing up for a pin from the IRS. That pin will come in the year each year and is just for you alone. Protect yourself and stay in the know by making sure to look for the preparer’s signature on your return and hold your preparer accountable if they don’t.

Learn more about this at IRS.gov. Citing: 25.20.2 Ghost Preparer Treatment | Internal Revenue Service

Disclaimer: The view expressed in this article is the opinion of the writer and is not tax advice. Tax law is always subject to change. This article is for informational purposes only. Always consult a qualified tax professional for advice on tax planning and strategies.