#United States #Sacramento #tax scams #ghost tax preparers #CTEC

CTEC's Warning on Tax Scams

Every year, California experiences a troubling rise in scams involving individuals known as “ghost tax preparers.” These unauthorized tax preparers market themselves with remarkably low fees and promises of significant refunds. However, they often vanish after the tax season ends, leaving clients vulnerable to potential repercussions.

Fernando Angell, the president of the California Tax Education Council (CTEC), which oversees around 40,000 tax preparers in the state, stresses that ghost tax preparers intentionally avoid signing the tax returns they prepare. This lack of accountability allows them to operate outside the law, making it exceedingly difficult for authorities to trace them. According to Angell, “Not signing a client's tax return is not only unethical but also illegal.”

The tactics employed by ghost tax preparers are often deceptive and designed to evade detection. A common practice involves providing printed tax returns for clients to sign, while they bypass legally required information including their own name. They may also electronically file taxes and portray the return as “self-prepared,” further obscuring their identity.

Lester Crawford, a CTEC board member, points out that these scammers excel at attracting vulnerable taxpayers. “They rely on word-of-mouth promotions and frequently switch locations to avoid scrutiny,” he adds.

Warning Signs of Ghost Tax Preparers

Before submitting your tax documentation, be on the lookout for these alarming indicators:

• - Signature and registration omissions: Ghost tax preparers don’t sign the returns they submit to the IRS or state tax authority, which easily avoids accountability.
• - Blank submissions: They may issue a business card for their documentation but file blank forms to the authorities.
• - Delayed signatures: Be suspicious if they promise to sign your tax documents later, particularly after receiving payment.
• - Cash demands: If they insist on cash payments without providing a receipt, tread carefully.
• - Falsified information: They might fabricate income or deductions, inflating potential refunds to entice clients.
• - Redirecting refunds: In extreme cases, they can siphon your tax refunds to their personal bank accounts.

To safeguard your financial interests, ensure any individual preparing your taxes for a fee is either an attorney registered with the California State Bar, a Certified Public Accountant (CPA), or a licensed tax preparer through CTEC as a Registered Tax Preparer (CRTP) or IRS Enrolled Agent (EA).

If you fear you have engaged with a dubious tax preparer, you can file an anonymous complaint at CTEC.org. For additional tips on how to ensure safety this tax season, tune in to the ‘Taxpayer Beware’ podcast, which is also available in Spanish on the taxpayer education platform contribuyentecudese.org.

Established by the California State Legislature in 1997, the CTEC is dedicated to protecting taxpayers from fraud and incompetent tax preparers. They continue to advocate for tax education and a responsible tax preparation environment, making it imperative for all California residents to remain informed and vigilant during tax season.