IRS Warns Taxpayers to Carefully Choose Their Tax Preparer: What to Know
Blake Stimac
5 min read
Keep your sensitive information safe by picking a reliable tax preparer.
We're nearly a month away from the tax deadline, so if you haven't filed your taxes yet, you might be considering hiring a professional to do it for you. While you can do it on your own for free, hiring a professional tax preparer can relieve some stress, especially if you're unfamiliar with the process or know the types of tax credits you might be eligible for. However, the Internal Revenue Service is quick to remind taxpayers they should be careful when picking a tax professional to handle your return.
According to a new CNET survey, more than 44% of tax filers have anxieties or fears about filing taxes this year, with Gen Z and millennials leading the charge. Much of the anxieties are around making a mistake when filing taxes, which is why so many people opt to have a professional do their taxes.
I chatted with Jassen Bowman, IRS enrolled agent and tax expert, to get some additional context on why it's important to choose your tax preparer wisely. "Tax returns basically contain every piece of information necessary to commit identity theft and various types of fraud," he said. "Criminals are attracted to the tax preparation business in order to commit crimes and rip people off."
There's a lot of money at stake for sure: The IRS has already sent out over $124 billion in refunds so far. Maybe you're still getting things in order to do your 2024 taxes. The IRS wants to make sure you're making informed decisions when choosing someone to prepare your tax returns. For more on taxes, don't miss our 2025 tax cheat sheet with essential tips you should know.
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Prepare your own taxes online for free
In addition to providing a free way to file your taxes, IRS reminds taxpayers that some eligible individuals can also get free tax help through Volunteer Income Tax Assistance or Tax Counseling for the Elderly. Generally, VITA services are reserved for people who earn $67,000 or less per year, people with disabilities and limited English-speaking individuals who need help doing their taxes.
The IRS-managed VITA and TCE services are operated by IRS partners and consist of volunteers who must pass tax law training that meets or exceeds IRS standards. Eligible taxpayers are encouraged to use the VITA Locator Tool online or call 800-906-9887.
Watch out for red flags of tax preparers
There are some clear signs when something is amiss. Here are two to be on the lookout for.
Ghost preparers
This type of tax preparer will complete your tax return but will not sign it so they don't leave a footprint. For e-filing, they will refuse to digitally sign the return as the paid preparer. This could be a sign of potential fraud.
Require payment in cash only and not provide a receipt.
Direct refunds into their bank account rather than the taxpayer's account.
Invent income to erroneously qualify their clients for tax credits or claim fake deductions to get a higher refund.
Lack of a valid PTIN
Every paid tax preparer must have a valid preparer tax identification number and include it when signing any tax return they prepare for someone. But a valid PTIN might not be enough. Bowman explained to CNET that it has limitations. "While all tax preparers that prepare returns for money are required to register with the IRS and obtain a Preparer Tax Identification Number (PTIN)," he said via email, "that's all it is — a registration requirement. There is no training, testing, etc., required by the IRS."
Bowman also recommends that people research their potential tax preparer through sites like the BBB, Google and online review sites to find out the experiences other taxpayers have had. Whether they're an attorney, CPA or an IRS-licensed enrolled agent, you can find a list of disciplinary actions, if there are any, for the tax preparer. (An enrolled agent has the same standing as attorneys and CPAs to represent people who have administrative issues with the IRS.)
This is why you should source your preparer by vetted means, like the official IRS directory.
Tax expert tips for choosing a preparer
Bowman also has some additional things to watch out for when choosing someone to prepare your tax return.
Avoid tax preparers claiming that they can give you a larger refund than anyone else. "That's another red flag, indicating they might be doing something illegal in order to inflate your refund," he said.
Avoid preparers that will "take your word" on your Social Security number or prepare your taxes based on your last paystub for the year instead of a proper W-2 form. "These actions are not only violations of IRS rules, but indicators of a preparer that might be doing some shady stuff," he said.
Another sign of potential fraudulent behavior is a tax preparer asking you to sign a blank tax return or not adding their name and PTIN on it.
IRS tips that for choosing your tax preparer
The IRS offers several tips that any taxpayer should look out for. Here are some highlights:
Discuss service fees upfront. Not doing this could result in hidden fees that you weren't expecting. The IRS suggests avoiding preparers who base their fees on the percentage of the refund.
Even if you don't feel like a tax expert, review the prepared tax return carefully to the best of your ability. Don't hesitate to ask questions if something doesn't look right. Always check the banking information for the refund is your and not that of the preparer.
The preparer that you choose should ideally be available year-round. Tax questions may come up after the filing season ends.
Understand your preparers' credentials and ask about them if you need clarification.
Report preparers that commit misconduct
Any sort of misconduct performed by your tax preparer should be reported. If they've done it to you, there's no reason to believe it was their first time or that they won't target others going forward. The IRS offers an easy way to do this and some pointers for you to figure out whether it's time to file a complaint. For more, don't miss our 2025 tax hub for all things tax related.
