Ghost Preparer

A ghost preparer is a paid tax return preparer who prepares a return but does not sign it and does not enter a Preparer Tax Identification Number, so the filed return appears to be self-prepared. The IRS's own description, in Tax Tip 2026-27 of April 1, 2026, is that "paid preparers must sign and include a valid Preparer Tax Identification Number on every tax return," that a "ghost" preparer "prepares a return but refuses to sign it and/or refuses to include a PTIN," and that "when a preparer refuses to sign or provide a PTIN, that is a major red flag; the taxpayer is legally responsible for what is filed." The behavior has a name because it is not an oversight. Anonymity is what makes the rest of the scheme possible.

Two separate duties, from two different sources. The identification number is statutory. Internal Revenue Code section 6109(a)(4) provides that "any return or claim for refund prepared by a tax return preparer shall bear such identifying number for securing proper identification of such preparer, his employer, or both, as may be prescribed." The signature is not written into the statute in the same way: section 6695(b) imposes a penalty on a tax return preparer "who is required by regulations prescribed by the Secretary to sign such return or claim, and who fails to comply with such regulations." So the accurate statement is that the Code penalizes a preparer who fails to sign as the regulations require, and that the number itself is a statutory requirement. Section 6695(c) penalizes failure to comply with section 6109(a)(4) separately. Both penalties are excused where the failure is due to reasonable cause and not to willful neglect, both are charged per return or claim, and both carry an annual maximum. Section 6695(h)(1) adjusts every dollar amount in the section for inflation, keyed to the calendar year the return is filed rather than to the tax year, which is why the current figures are published a year ahead in a revenue procedure.

Why the anonymity matters more than the paperwork. A signature and a PTIN are what let the IRS connect a pattern of returns to one person, and they are what let a taxpayer show that someone else prepared the return. Remove them and three things follow. The preparer can take positions they would not put their name to. The IRS has no efficient way to find the other returns from the same source. And the taxpayer, who signed the return under penalties of perjury, has nothing to point at.

What the schemes usually consist of. The IRS's Tax Tip on the subject says ghost preparers "also often exploit credits by promising large refunds," and then lists, with an express "may," that such preparers may exaggerate eligibility for deductions, claim credits the taxpayer does not qualify for, and disappear after filing, leaving the taxpayer responsible for penalties, interest or audits. That hedge is worth keeping: the list describes what the IRS has seen, not what every unsigned return contains. Two further patterns sit on the IRS's own list of preparers to watch out for, in Fact Sheet FS-2026-06 of March 2026, and both are checkable on the return itself. The agency names a preparer who will "charge a fee as a percentage of a taxpayer's refund, or offer to split the refund with the taxpayer," which gives the preparer a direct interest in how large the refund is. It also names one who will "direct deposit a refund into their bank account rather than the client's." On that second point the IRS is careful rather than absolute: it says the best practice is for the refund to reach the taxpayer's own account, that there are legitimate reasons for a refund to be deposited in a practitioner's account, such as an agreement to pay preparation fees out of it, and that the practitioner has to explain every fee and deduction and the client has to understand and agree to them. An unexplained account is the warning sign, not the mechanism itself.

Where the liability actually sits. A return is signed by the taxpayer under penalties of perjury, and the tax, interest and any penalty are assessed against the taxpayer. Discovering that a preparer invented a credit does not shift the assessment; it opens a separate question about the preparer's own exposure, which the IRS pursues on its own account. That asymmetry is the whole reason the signature requirement exists, and it is why the missing signature is worth noticing before the return is filed rather than after.

What a legitimate paid preparer looks like on the page. The paid preparer section of the return is completed: a name, a signature, a PTIN, and the firm's details. That is a documentation test, not a competence test, and the separate question of what qualifications a preparer holds is a different subject with its own answer. What the completed section does establish is that a named person has accepted responsibility for having prepared the return.

The sequence usually runs like this, and it is interruptible at more than one point.

1. The engagement. The fee is often quoted against the size of the refund rather than against the work, and paid in cash or taken out of the refund.
2. The preparation. The return is prepared by the preparer, sometimes with little documentation requested from the taxpayer.
3. The signature block. The paid preparer section is left blank, or the return is presented as self-prepared through consumer software.
4. The filing. In some cases the taxpayer is asked to sign a blank or incomplete return, which is never appropriate.
5. The refund. All or part of it may be routed to an account the taxpayer does not control.
6. The aftermath. If the IRS disallows a position, the notice goes to the taxpayer, and the preparer is often unreachable.

A hypothetical. Naomi pays a preparer who quotes "a slice of whatever we get back." The preparer claims a $6,000 credit Naomi does not qualify for, takes a $1,500 fee out of the refund, and leaves the paid preparer section blank. Two years later the IRS disallows the credit.

Naomi owes the $6,000 back, plus interest running from the original due date of the return, plus whatever penalty applies to the position. The $1,500 fee is gone and there is no signature or PTIN on the return to identify who to pursue for it. Her out-of-pocket cost is the $6,000 repayment plus the $1,500 fee, or $7,500, before interest and any penalty, in exchange for a refund she was never entitled to.

Three checks stop this before it starts. Ask for the preparer's PTIN before the work begins. Read the paid preparer section of the finished return before signing it. Confirm the refund is going to your own account and that the refund amount on the return matches what you were told.

What the rules give you

• The signature and identification requirements are easy for a taxpayer to check, on the finished return, before signing it.
• A completed paid preparer section gives the IRS a way to trace a pattern of returns to one source, which is what makes enforcement against bad preparers possible at all.
• The penalties in Internal Revenue Code section 6695 are charged per return, so a preparer who omits a signature across many returns accumulates exposure.

The exposure you are left with

• The taxpayer signs under penalties of perjury and carries the liability for every figure on the return.
• Repayment of a disallowed refund comes with interest from the original due date, so the cost keeps growing while the matter is unresolved.
• The fee is usually unrecoverable, and there is no signature or identification number on the return to identify who to pursue.
• A refund-share fee gives the preparer a direct interest in the size of the refund, which is the opposite of the interest the taxpayer has.
• The return contains a complete set of identity data, and a preparer who cannot be identified is a poor custodian of it.
• Signing a blank or incomplete return means signing something you have not read, under penalty of perjury.