In fiscal year 2020, ADOR stopped more than $19 million from fraudulent tax returns, which is three times the amount compared to last year.
Halloween time is no different. Taxpayers are reminded to be cautious and not to be haunted by past “ghost” prepared returns.
A ghost preparer is paid to prepare a tax return, but does not sign it or include necessary information. The Arizona Department of Revenue (ADOR) warns taxpayers of possible scams if a preparer won’t state their name on the tax return.
By law, anyone who prepares or assists in preparing federal and state tax returns for compensation must have a valid 2020 Preparer Tax Identification Number (PTIN)(link is external). Paid tax preparers are required to sign and include their PTIN on the paper tax returns they prepare. For electronically filed returns, the preparer must list their name and PTIN.
By not providing the required information, it may appear the return was self-prepared, which benefits the ghost tax preparer by staying under the radar. Also, ghost preparers may promise a larger refund and charge fees based on a percentage of the refund, which is prohibited.
The Department of Revenue advises taxpayers that it is important to ask questions and carefully review their tax returns. Ultimately, the taxpayer is responsible for what is filed, regardless of who prepared the return.
Tips for taxpayers:
- Verify if the preparer is available year-round to explain how the return was prepared in the event of an examination.
- Confirm any additional costs for service prior to preparation.
- Ask any questions before signing and filing. Ask the preparer to explain deductions, credits, and wages claimed.
- Ensure the tax preparer provides you with a copy of the entire return, including schedules, if there are itemized deductions or credits.
- Carefully review the tax return before submitting, ensure numbers are correct, and schedules add up to source documents.
ADOR recommends taxpayers with concerns about their tax preparer should report it to the department’s “Report Tax Fraud Hotline” (602) 542-4023 or at https://azdor.gov/contact-us/report-tax-fraud.
For more information please visit:azdor.govarizona department of revenue
october 30, 2020