Don't Mess With Taxes

These ghostly trick-or-treating dogs are more cuddly than scary. But ghost tax preparers can be terrifying. Don't let one haunt you.

There's one thing that scares the Internal Revenue Service and taxpayers alike. Tax scams.

One such ploy that popped up during the summer is making rounds again this Halloween season in a new, shall we say, costume. It's the one where the calling crook pretends to be from the Social Security Administration.

"In the latest twist on a scam related to Social Security numbers, scammers claim to be able to suspend or cancel the victim's SSN. It's yet another attempt by con artists to frighten people into returning 'robocall' voicemails," noted the IRS in its recent warning about this scam resurgence.

I've gotten several scam calls this week, including the reworked Social Security one. The electronic voice did indeed "warn" me that my official government issued identification number was about to be canceled.

But I didn't call back the number left by the robocalling scammer. Instead, I followed the IRS advice and hung up my phone.

Scary tax preparer trouble: Sometimes, though, tax scammers take a personal approach.

Yep, I'm talking about unethical tax return preparers.

Disreputable tax preparers are, alas, so common that tax professional fraud regularly makes it onto the IRS' annual Dirty Dozen list of tax scams.

We're still a few months away from tax-filing season, but since Halloween is almost here, it's a good time for a reminder about one type of spooky tax pro, the ghost preparers.

Ghostly get-arounds: By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid Preparer Tax Identification Number, or PTIN, for the current tax season.

Paid preparers also must sign the return and include their PTIN.

Ghost preparers, however, do not sign the return. Instead, they print out the Form 1040 and tell the taxpayer to sign and mail it to the IRS.

When it comes to e-filed returns, these spooky preparers do fill out the forms electronically, but refuse to digitally sign the documents as the paid preparer.

Scaring up ill-gotten cash: One thing ghost preparers share with other unscrupulous tax professionals and scammers is that these tax filing ghouls are not looking out for their taxpaying clients.

Rather, they're looking to make a fast buck by promising a big refund or charging fees based on a percentage of the refund.

Some of the ways ghost tax return preparers go about getting taxpayer money include:  

• Requiring payment in cash only and not providing a receipt.
• Inventing income to erroneously qualify their clients for tax credits or claiming fake deductions to boost their refunds.
• Directing refunds into the ghost preparers own bank account rather than the taxpayer's account.

If your preparer does or suggests any of these actions, take the advice of one of the best modern scary movies and Get Out!

Don't let a tax pro mistake haunt you: The 2020 tax filing season will be here before you know it.

Don't be in such a hurry to file for an expected refund that you use an ill-prepared or worse a crooked tax preparer. You, the taxpayer, are ultimately responsible for anything on your Form 1040 so wrong information entered by a paid preparer will come back to haunt you.

Check out any tax professional you're considering hiring carefully. You have lots of options. Review them all to find a tax prepare who understands and meets your personal tax needs, as well as passes some basic vetting tests.

The IRS also has a special online page about picking a tax pro. There you'll find added info on tax preparer credentials and qualifications and a directory you can use to find qualified and ethical tax help.

During the filing process, review your tax return carefully before signing and ask questions if something is not clear. Never sign a tax return that's not completely filled out. And make sure your tax pro signs, either with a pen-to-paper real John Hancock, or electronically using the IRS-required identification preparer protocol.

As for your refund, especially if it's going to be directly deposited, double check both the routing and bank account numbers on the completed tax return to ensure they go to your, not the preparer's, account.

Busting bad tax preparers: Who you gonna call if you've hired a bad or ghost other type of bad tax preparer? The IRS.

OK, the IRS would rather you contact them via mail rather than call, but c'mon, admit it. You clicked on that great original (can you believe it's been 35 years!?) Ghostbusters theme song, didn't you?

As for ghostly and other terrible tax preparers, the IRS has official forms you can file to report unscrupulous paid tax assistance. Such complaints are doubly important when you suspect a tax preparer of filing or changing your return without your consent.

I know that these worries are still a few months off. But they definitely are scary enough to warrant an early warning this Halloween season.

Be safe as you and your youngsters (or just you; no age judging here) are trick-or-treating and in the coming tax season as you seek help in filing your return.

You also might find these Halloween related items of interest …

• 5 Halloween tax break treats
• 4 ways the IRS is scary, on Halloween and year-round

As well as these items on finding good and reputable professional tax help:

• Picking a tax pro
• Free tax help for many filers at VITA, TCE sites
• Add EAs to the tax preparation — and privacy — mix

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