California Warns Against “Ghost” Tax Preparers

Paid tax preparers who don’t sign tax returns are one of the biggest
threats to taxpayers

SACRAMENTO, Calif.–(BUSINESS WIRE)–#2017taxseason–It is a problem that happens every tax season. Ghost tax preparers. Who
are they? They charge a fee to do taxes, but they never sign client tax
returns.


“The problem with ghost tax preparers is they are almost impossible to
track down because they leave no trace of existence after tax season,”
said Lester Crawford, chair of the California
Tax Education Council (CTEC)
, a state-mandated nonprofit
organization that manages the registration of more than 40,000
unlicensed tax preparers.

Unlike most states, California has set standards for paid tax preparers.
California law requires anyone who prepares tax returns for a fee to be
either an attorney,
certified
public accountant (CPA)
, CTEC-registered
tax preparer (CRTP)
or enrolled
agent (EA)
. Each professional must pass an initial test and follow
educational requirements.

Tax preparers are also required to sign client tax returns and provide a Preparer
Tax Identification Number (PTIN)
from the Internal
Revenue Service
on all federal tax returns they prepare for a fee.

Yet despite state and federal requirements, there are still countless
ghost tax preparers who are defrauding taxpayers.

“Enforcement teams have very little information to go on right now. All
of us in the industry know ghost tax preparers are a problem. It’s how
big of a problem that no one really knows,” said Esperanza Escobedo,
CRTP and CTEC board member.

“It is vital that people report ghost tax preparers so state enforcement
teams can put them out of business,” Crawford said.

Tax preparers are a “ghost” if they…

  • List “self prepared” on the tax return instead of signing it with
    their individual name.
  • List the business name or business address on the tax return instead
    of their individual name.
  • Claim they “forgot” to sign the tax return and “promise” to sign it
    after you’ve paid them a fee to prepare the tax return.

CTEC is a nonprofit organization that was established in 1997 by the
California State Legislature to protect taxpayers against fraud and
incompetent tax preparers. Taxpayers can report ghost tax preparers at ctec.org
or visit reporttaxpreparerfraud.org
for more tips.

Contacts

California Tax Education Council
Gigi Jones, 916-296-6913
gjones@ctec.org