How to avoid ‘ghost preparers’ and other tax scams as deadline nears

As the April 15 federal tax deadline approaches, most taxpayers have less than two weeks to submit their 2023 personal income tax returns or request an extension – but for fraudsters, it’s still enough time to attempt to steal personal and financial information from filers.

Last year, the IRS received 294,138 identity theft complaints, the second highest in its history. The agency’s criminal investigators have identified more than $5.5 billion in tax fraud.

According to its March 22 report, the IRS processed 79.2 million federal returns, or nearly half of the 167 million individual tax returns it expects to file this season, according to the spokesperson of the IRS, Eric Smith.

Taxpayers who have not yet filed or paid their taxes should take precautions, fraud experts say.

“File electronically or go directly to the post office to mail your tax returns or a tax payment,” said Jennifer Hessing, director of fraud analysis at Wells Fargo. “External mailboxes can be targets for theft, as fraudsters seek to steal personal information or checks sent for tax payments.”

Here are three common tax scams and ways to avoid them:

If you receive an email, text or call from an unknown person or company offering to evaluate your potential tax savings or get a larger refund, be wary.

The pitch might look like this: “We’d love to get this (refund) to you as easily and as quickly as possible. All you have to do is provide us with information, and we’ll make it happen,” Steve said . Earls, head of consumer data security at IDShield. “If you’re like, ‘I don’t trust you, do you have a phone number I can call?’ They even have fake call centers. It’s the same kind of conglomerate.”

Calls, emails, or text messages from scammers posing as legitimate tax or financial organizations may also ask for valuable personal and financial information that could lead to identity theft.

Other programs can help you create an online account at IRS.gov to complete and process your return more quickly. You may be asked for your Social Security number or individual tax identification number and photo identification to create the online account.

The fraudster can then sell this information or use it themselves to file fraudulent tax returns, open credit card accounts, or obtain loans.

A “ghost tax preparer” may prepare your return but not sign the document or provide their address or tax identification number. They may assume that you will sign a declaration without verifying this information and have then already entered your personal and financial information.

One of the easiest ways to spot a scam is when a taxpayer hires someone to prepare a return and the information on the paid preparer section of the return is missing or says “self-prepared,” said Miklos Ringbauer, accountant based in Los Angeles.

“This should be the very first and biggest red flag for a client when considering a return for review,” he said. “A taxpayer should never file a return and simply sign without reviewing their return.”

CNBC’s Stephanie Dhue contributed reporting.

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