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Sunday March 24, 2019

Washington News

Washington Hotline

IRS Cautions - Avoid "Ghost" Tax Preparers

As taxpayers gather their W-2s, Forms 1099, charitable gift receipts and other financial information, tax filing season is now in full gear. In IR-2019-9, the IRS cautioned taxpayers not to use tax preparers who refuse to sign the taxpayer's return. These individuals are called "ghost" preparers, because their names are not on the tax returns.

The IRS requires each paid preparer to have a 2019 Preparer Tax Identification Number (PTIN). The paid preparer includes his or her PTIN and signs the tax return. For e-filed returns, the paid preparer may use a digital signature.

Ghost preparers often violate many rules and ethical practices. Preparers may promise an oversized refund or charge a fee based on a percentage of the refund. Some will increase a taxpayer's income in order to qualify for the earned income tax credit (EITC) or create false deductions to lower taxes.

The IRS urges taxpayers to be certain the refund is directed to the taxpayer's bank account and not to the preparer's account. If the refund is sent to the tax preparer's account, both the preparer and the refund may disappear.

The "Choosing a Tax Professional" page on www.IRS.gov explains the proper tax preparer credentials and qualifications. Many tax preparers are also listed on the IRS' "Directory of Federal Tax Return Preparers with Credentials and Select Qualifications."


Published February 8, 2019
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Any tax consequences described on this page are based on U.S. federal tax law. Charitable deductions from state and local taxes or from Canadian and provincial taxes may not be available to the same extent as from U.S. federal taxes. The Jewish Federations of North America (JFNA) does not provide legal advice. Donors are encouraged to seek independent tax and legal counsel. You may read JFNA's charitable solicitation disclosure statement here and important information about endowment gifts and bequests to JFNA here.