Ghost preparers leave clients answering to the IRS

Beware! A return marked “self-prepared” can hide a paid preparer’s work. The client may have paid someone to calculate the refund, then followed instructions to submit the return themselves.

When the IRS questions the figures, the person who prepared them may be missing from the return entirely. This ghost-return-preparer problem persists heading into the 2027 filing season. An October 2026 GAO report found that disconnected IRS systems prevent the agency from knowing how many ghost preparers it has identified and addressed. In addition, recent prosecutions show how concealed preparation can accompany substantial refund fraud; the penalties will spook you.

Who must sign and provide a PTIN?

The signing preparer is the individual with primary responsibility for the return’s overall substantive accuracy. They must both sign it and include their preparer tax identification number (PTIN). When employed by or associated with a firm, the firm’s employer identification number (EIN) generally must also appear.

A supervised employee may substantially prepare a return while a partner reviews and signs it. The employee may still need their own PTIN even though their name and number do not appear in the paid-preparer section. Purely clerical assistance, such as entering names and addresses without substantive tax judgment, does not create preparer status.

A ghost preparer is one who refuses to provide a required signature or PTIN despite being paid to prepare the return. Having the taxpayer submit the return themselves does not remove a paid preparer’s obligations.

Fabricated deductions and refund-based fees can signal this scheme, but neither alone identifies someone as a ghost preparer.

Recent cases go beyond missing signatures

On March 17, 2026, Burlington, North Carolina, preparer Tracey Hernandez received 25 months in prison and was ordered to pay $2,106,281 in restitution. She left her signature off more than 200 false individual returns, which included fraudulent education claims and business-related items.

In a September 2026 announcement, the Justice Department reported that Detroit preparer Rodney Underwood pleaded guilty to making a false claim. He left the paid-preparer section blank on returns claiming more than $7 million in fraudulent refunds. He is scheduled to be sentenced on Jan. 6, 2027. Both cases involve fraudulent claims, beyond the failure to identify the preparer.

Separate civil penalties apply to identification failures. For returns or refund claims filed in 2027, failure to sign carries a $65 penalty under §6695(b), capped at $33,000 annually. Failure to furnish required identification triggers a separate §6695(c) penalty with the same amounts. Note that both allow relief for reasonable cause without willful neglect.

How the TAS Act would target concealed preparation

As NATP reported, the Senate passed the Taxpayer Assistance and Service (TAS) Act as amendments to H.R. 5349 on Sept. 30, 2026. While not yet law, the Senate-approved text would make willful failure to furnish required preparer identification a felony. It also targets deliberate use of an invalid PTIN to evade identification requirements, with potential imprisonment of up to three years. Separately, the IRS would gain express authority to deny or revoke PTINs for specified misconduct, subject to procedural protections.

These provisions address concealment and a preparer’s continued access to a valid PTIN. The identification-number amendments would apply to filings more than 18 months after enactment. The PTIN oversight amendments would take effect 180 days after enactment.

When a new client brings a ghost-prepared return

Confirm what was filed and whether it matches what the client authorized. Compare available IRS return information with the client’s copy and supporting records. Preserve evidence of the paid engagement, such as an invoice or messages.

The IRS’s preparer-misconduct page provides reporting options, including for recipients of Letters 4733 or 6623. Receiving either letter does not automatically require an affidavit.

Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit, supports qualifying individual-return account corrections involving unauthorized filing or changes, including refund diversion. Follow its documentation requirements when requesting account relief.

A blank paid-preparer section starts your inquiry. Whether the return needs correction depends on what was reported and what the client authorized. Establishing those facts gives you a basis for choosing the next step.