Most tax preparers are honest. But the field is barely regulated — no license is required in Alabama, and the federal PTIN needs no exam — so the barrier to setting up shop is close to zero. The scams that follow are consistent enough that you can learn the whole pattern in a few minutes.
The one-line version: a paid preparer who will not sign your return is the single clearest warning sign there is. Federal law requires the signature and their PTIN. Refusing means they are deliberately removing the link between themselves and what is on your return.
The ghost preparer
This is the most common scheme, and the IRS names it every filing season. A ghost preparer takes your documents, prepares the return, charges you — then leaves the paid-preparer section blank so the return appears self-prepared. Often they will ask you to sign a blank or incomplete form, or file it electronically without showing you the final version.
The reason is straightforward. Once their name is off the return, inflated deductions, fabricated dependents, and invented business losses carry no consequence for them. The IRS sees a taxpayer who filed their own return and claimed things they could not support. You owe the tax, the interest, and the penalties, and the preparer has vanished — frequently along with part of the refund.
Warning signs, roughly in order of severity
- They won't sign the return or provide a PTIN. Non-negotiable. Stop here.
- The refund is deposited anywhere other than your own account. Check the routing and account numbers on your copy before it is filed. Your refund should go to your bank, in full.
- They ask you to sign a blank or unfinished return. You are signing under penalty of perjury for figures you have not seen.
- Their fee is a percentage of your refund. This pays them to make your refund bigger, which is the opposite of what you want from someone attesting to your income.
- They promise a specific refund before seeing your documents. Nobody can know your refund before they know your numbers. A guarantee up front means the number is the goal, not the result.
- They advertise "bigger refunds than anyone else." Your refund is determined by your finances and the tax code, not by who fills in the boxes. Every preparer working honestly from the same documents lands in the same neighborhood.
- They invent deductions you cannot document, or ask you to. Charitable gifts you did not make, a home office you do not have, dependents who are not yours.
- They won't give you a copy of the filed return. You are entitled to it. Get it before you pay.
- Cash only, no receipt, no written agreement, no permanent office. A pop-up operation that closes in April cannot help you in October, when a notice would arrive.
Why "I'll just get it amended later" doesn't work
When the IRS challenges a return, it comes to the person who signed it. That is you. A preparer with no credential has no authority to represent you before the IRS at all — so even a well-meaning one cannot argue your case. Only a CPA, an enrolled agent, or an attorney holds unlimited representation rights, which is covered in more depth in our guide to the three credentials.
Practically, this means the downside of a bad preparer is not a wasted fee. It is back taxes and penalties, assessed against you, with nobody obligated to help you resolve them.
Five minutes of prevention
- Verify the credential yourself. If they say CPA, confirm it in the Alabama State Board register — our license lookup searches the same data by name or license number. If they say enrolled agent, the IRS publishes a lookup. Our verification guide covers doing this at the source.
- Ask for the PTIN before you hand over anything. An honest preparer gives it without hesitation.
- Read the return before signing. Check the income, the dependents, the deductions, and the bank account on the refund line. You do not need to understand every schedule to notice a deduction you never mentioned.
- Get the fee in writing, in advance.
- Confirm they will be reachable after April. IRS letters arrive months later.
If it already happened
Acting quickly and on your own initiative counts for a great deal here, both with the IRS and with your eventual bill.
- Get a copy of what was actually filed. Request a tax transcript from IRS.gov if the preparer will not provide the return.
- Amend the return if it contains anything false. Voluntary correction is treated very differently from being caught.
- Report the preparer to the IRS using Form 14157, and Form 14157-A as well if they filed or altered the return without your consent.
- If they claimed to be a CPA, report them to the Alabama State Board of Public Accountancy — the board licenses and disciplines CPAs in this state, and a false claim of licensure is itself actionable.
- If your refund was diverted, file Form 3949-A and contact your bank.
- Keep everything. Texts, receipts, business cards, the advertisement you responded to.
This guide is general information, not tax or legal advice. Tax situations turn on specific facts, and the forms and procedures above change — confirm current requirements with the IRS or a licensed professional before acting.
Frequently asked questions
What is a ghost preparer?
A ghost preparer is someone who is paid to prepare your return but does not sign it as the preparer, leaving the return looking self-prepared. Federal law requires any paid preparer to sign and include their PTIN. Leaving it blank is not a technicality — it removes the paper trail linking them to the return, so if the numbers are inflated, the consequences land entirely on you.
Am I responsible if my preparer put false information on my return?
Yes. You sign the return, and legally you are responsible for what it says — even if a preparer inflated deductions or invented a dependent without telling you. That is precisely why the scam works and why reviewing the return before signing matters. If you discover an error after filing, amending it promptly and voluntarily is viewed far more favorably than waiting for the IRS to find it.
Is it legal for a preparer to charge a percentage of my refund?
It is a serious red flag and is prohibited for certain filings, but the deeper problem is the incentive: a preparer paid more when your refund is bigger has a direct financial reason to inflate it. Legitimate preparers charge based on the complexity of the return or an hourly rate, quoted before work begins. Walk away from percentage-of-refund pricing.
My refund never arrived. What should I do?
Check "Where's My Refund" on IRS.gov first — delays are common and usually innocent. If the IRS shows the refund as issued but you never received it, look at the bank account and routing number printed on your copy of the return. A scam pattern is routing all or part of the refund to the preparer's account. If the account is not yours, report it to the IRS immediately and file Form 3949-A.
How do I report a fraudulent tax preparer?
Report preparer misconduct to the IRS using Form 14157 (Return Preparer Complaint), and Form 14157-A as well if the preparer filed or altered your return without your consent. If the person claimed to be a CPA, also report them to the Alabama State Board of Public Accountancy, which licenses and disciplines CPAs in this state. Keep every document, receipt, and text message you have.
Does Alabama license tax preparers?
No. Alabama does not license tax preparers, and neither does the federal government beyond requiring a PTIN, which involves no exam or education. Only CPAs (licensed by the Alabama State Board of Public Accountancy), enrolled agents (licensed by the IRS), and attorneys hold credentials that can be verified and revoked. Anyone else advertising tax preparation is unregulated, which is legal — and exactly why verifying matters.
Start with someone whose license you can check
Every CPA in this directory holds an active Alabama license, built from state board records — so verification takes seconds.