IRS warns taxpayers of 'ghost' preparers who promise big refunds, file fraudulent returns and vanish without a trace

Core Viewpoint - The approaching tax season is expected to see an increase in fraudulent tax preparers, known as "ghost" tax preparers, who exploit the confusing tax landscape to deceive clients and evade accountability [1][2]. Group 1: Nature of the Scam - Ghost tax preparers operate without signing the returns they prepare, which allows them to avoid accountability and makes it difficult for authorities to track them down [2]. - These fraudsters often promise quick refunds and prepare returns with fabricated deductions or inflated income claims to generate large refunds [4]. - Clients are misled into believing they are filing their own returns, as ghost preparers either have clients sign the returns themselves or submit them electronically without a preparer's signature [5]. Group 2: Red Flags and Warning Signs - Red flags include the preparer putting business labels on clients' copies while filing blank versions with tax authorities, demanding cash payments without receipts, and insisting on signing returns only after receiving payment [6]. - The Better Business Bureau (BBB) highlights that ghost preparers leave clients vulnerable to IRS penalties since the returns appear self-filed [5]. Group 3: Unique Challenges in the Current Tax Season - The 2026 tax season is anticipated to be particularly challenging due to new tax changes introduced by the One, Big, Beautiful Bill Act, signed into law on July 4, 2025, which many Americans may not fully understand [7].