Ghost Busters — How to Identify Bad Tax Preparers
What This Video Covers
Tax-exempt status is not a permanent guarantee — it is a privilege that comes with ongoing obligations. This video covers the tax compliance responsibilities that nonprofits and other tax-exempt organizations must meet to protect their status and avoid IRS scrutiny.
Key topics addressed include:
- What defines a “ghost” tax preparer under IRS rules
- The eight red flags that identify a ghost preparer before you hand over your information
- Why the taxpayer — not the preparer — is legally responsible for everything on the return
- The specific penalties and criminal exposure that ghost-prepared returns create
- Form 14157 (Complaint: Tax Return Preparer) — how to report a ghost preparer to the IRS
- Form 14157-A (Tax Return Preparer Fraud or Misconduct Affidavit)
- The amended return process for correcting fraudulent filings
- IRS Voluntary Disclosure as an option for taxpayers with multi-year exposure
- How to vet a legitimate tax professional going forward
- The role of Attorney-Client Privilege when cleaning up prior-year problems
Why This Matters
Most taxpayers who end up in our office with ghost preparer problems did not knowingly hire a fraud. They hired someone who seemed competent and affordable — sometimes someone recommended by a friend or family member. The problems only became visible when the IRS contacted them months or years later.There are warning signs.
About the Presenter
Benjamin A. Goldburd, Esq.
Goldburd McCone LLP
Benjamin brings focused experience in IRS collection defense, including lien and levy disputes, CDP hearings and negotiated resolutions. Our team’s combined backgrounds in accounting, business and wealth management ensure that enforcement responses account for the full scope of a client’s financial position.
Frequently Asked Questions About Tax Preparation
What exactly is a “ghost” tax preparer?
A ghost tax preparer is someone who prepares a tax return for compensation but does not sign the return and does not include their Preparer Tax Identification Number (PTIN). Federal law — specifically IRC § 6109(a)(4) and § 6695(b) — requires every paid preparer to sign the return and include their PTIN. A preparer who refuses to do so is violating federal law.
If my preparer made mistakes, am I really the one who gets in trouble?
Yes. Under IRC § 6012, every taxpayer is responsible for the accuracy of their own return. The law does not create an exception for returns prepared by someone else — whether that someone is a ghost preparer, a CPA, or your cousin who “knows taxes.” When you sign a return, you certify under penalties of perjury that the information is true, correct and complete. If it is not, the resulting tax deficiency, penalties and interest are your obligation.
Should I report my ghost preparer to the IRS?
Yes. File Form 14157 (Complaint: Tax Return Preparer) to report the preparer to the IRS Return Preparer Office. If the preparer’s misconduct affected your tax return, also file Form 14157-A (Tax Return Preparer Fraud or Misconduct Affidavit). These filings serve two purposes: they initiate an IRS investigation into the preparer, and they create a documented record that supports your argument that you were a victim of preparer fraud — not a willing participant.