IRS warns taxpayers of 'ghost' preparers who promise whopping refunds, file fraudulent returns and vanish without a trace. What you need to know

"Ghost tax preparers never sign the returns they prepare for clients. That's intentional — it allows them to avoid accountability and makes it nearly impossible for authorities to track them down," explained Fernando Angell, chair of the California Tax Education Council, in a PR Newswire press release (2).

How the scam works

Ghost preparers typically set up shop quickly, often operating through word-of-mouth referrals. They promise fast turnarounds and refunds that seem too good to be true — which they are.

According to the BBB, these fraudsters prepare returns with fabricated deductions or inflated income claims designed to generate large refunds. But when it's time to file, they have the client sign their own return or submit it themselves electronically without the preparer's signature, making it appear to be self prepared.

"The ghost preparer can print the paper return for their client and tell them to sign and mail it to the IRS. Or, for electronically filed returns, they will prepare it but won't digitally sign it as the paid preparer," the IRS confirmed (1).

Since the return appears to be self filed, the taxpayer becomes solely responsible if the IRS discovers errors. That often means paying back the fraudulent refund plus underpayment and negligence penalties, while the preparer has vanished without a trace.

Other red flags include putting business labels on clients's copies while filing blank versions with tax authorities, demanding cash payments without receipts, and insisting they'll sign returns only after receiving payment (2).

Why the 2026 tax season could be particularly tricky

This tax season presents unique challenges that scammers are poised to exploit. President Trump signed the One, Big, Beautiful Bill Act into law on July 4, 2025, introducing new tax changes that many Americans don't fully understand (3).

According to the IRS, the law created new deductions for 2025 through 2028, including no tax on tips (up to $25,000), no tax on overtime (up to $12,500), an additional $6,000 senior deduction for those 65 and older, and car loan interest deductions for new vehicles that have undergone final assembly in the U.S. (up to $10,000).

The IRS estimates approximately six-million workers report tipped wages (4), and millions more could benefit from overtime or senior deductions. This complexity creates opportunity for fraudsters promising to "unlock" these benefits with aggressive sales pitches.

How to protect yourself

By law, anyone preparing federal tax returns for compensation must have a valid Preparer Tax Identification Number (PTIN) and sign returns they prepare (1).

Here are some essential tips to avoid a ghost preparer during tax season:

Beware of unrealistic promises: Your refund amount depends on your tax information and current laws, not a preparer's sales pitch. If someone guarantees specific refund amounts before reviewing your documents, walk away.

Never sign your own return: If someone else prepared it, they must sign it and include their PTIN.

Review before filing: Check that your preparer signed the return and that your information is correct.