Published · 7 min read
Short answer: the red flags of a bad tax preparer are a preparer who will not sign the return or enter a PTIN, a fee based on a percentage of your refund, an offer to deposit your refund into their account, a refund promised before they have seen your documents, and a request to sign a blank form. The IRS lists all of these. You remain responsible for everything on your return, whoever prepares it, so check the preparer before you hand over your documents.
Every spring, people choose a tax preparer on price, convenience or a promise of a big refund, and most of them are well served. Some are not. Our resolution team spends much of its year cleaning up returns that other preparers filed, and the red flags of a bad tax preparer show up the same way again and again, usually months after the preparer has stopped answering the phone.
The IRS publishes its own list of warning signs, and we have built this guide on it. If you want a preparer who signs the return and answers for it later, see our tax preparation services page.
10 red flags of a bad tax preparer
Each of these comes from the IRS’s guidance on choosing a tax return preparer, its warning about “ghost preparers”, or its list of preparer misconduct.
| Red flag | Why it matters |
|---|---|
| 1. They will not sign the return or enter their PTIN | Paid preparers must sign and include a preparer tax identification number on every return. One who does not is what the IRS calls a ghost preparer. |
| 2. The fee is a percentage of your refund | It pays the preparer to make the refund bigger, not correct. The IRS says to avoid it. |
| 3. They want your refund deposited to their account | Your refund belongs in your account. Diverting it is on the IRS list of preparer misconduct. |
| 4. They promise a bigger refund than anyone else | Nobody can know your refund before seeing your documents. The IRS says to be wary of the claim. |
| 5. They ask you to sign a blank or unfinished form | The IRS’s advice is simple: never sign a blank tax form. |
| 6. They do not ask for records or receipts | Good preparers ask to see your documents and ask questions about income, deductions and credits. |
| 7. They file from your last pay stub instead of your Form W-2 | The IRS says never to hire a preparer who does this; it is against e-file rules. |
| 8. They add income or deductions you never had | Invented income to claim more credits, or fake deductions to boost a refund, are named in the IRS ghost-preparer warning. |
| 9. Cash only, with no receipt | The IRS lists cash-only payment without a receipt as a shady fee practice. |
| 10. A “fast refund” that turns out to be a loan | Not explaining that an instant refund is a refund anticipation loan, with fees and interest, is on the IRS misconduct list. |
We would add one more from experience: the office that is gone after April. Notices about a return often arrive in the summer or the following year, and the IRS itself advises choosing a preparer who will be around for months or years after filing to answer questions about it.
Why the bar to become a preparer is low
According to the IRS, anyone can be a paid tax return preparer as long as they have a preparer tax identification number. A first-time PTIN is issued online in about 15 minutes for an $18.75 fee, according to the IRS PTIN page. A PTIN on its own is not a professional credential. In an April 2024 warning the IRS put it plainly: preparing tax returns is unregulated, which adds risk for taxpayers during filing season.
That is why credentials matter. The IRS sorts preparers by their right to represent you:
| Preparer | Licensed by | Can represent you before the IRS |
|---|---|---|
| Enrolled agent | The IRS, after a three-part exam and a suitability check | On any matter, including audits, collections and appeals |
| Certified public accountant | A state board of accountancy | On any matter |
| Attorney | A state court or bar | On any matter |
| Annual Filing Season Program participant | Voluntary IRS program, no license | Only for returns they prepared and signed, and not on appeals or collections |
| PTIN only | No credential | Not at all |
Source: IRS, Understanding tax return preparer credentials and qualifications. Enrolled agents must also complete 72 hours of continuing education every three years.
How to check a tax preparer
- Ask for their PTIN and confirm it will be on the return they file.
- Look them up in the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications, which lists enrolled agents, CPAs, attorneys and Annual Filing Season Program participants by name and location. A preparer who is not listed may still be fine, but ask about their training.
- Check their history with the Better Business Bureau, as the IRS suggests.
- Ask about the fee before you hand over documents, and how it is calculated.
- Ask who answers notices about the return, and whether that person can represent you if the IRS opens an audit or a collection case.
What a good preparer does instead
The opposite of each red flag is a habit you can see at the first appointment. This is how our personal and business returns are prepared:
- You get a checklist, in English or Spanish, of what to bring, and we ask to see the documents behind every number.
- The preparer builds the return and a second person reviews it.
- We compare it to last year and to the income the IRS already has on file, because a mismatch is the most common reason a return gets a notice.
- We explain the result before you sign, then e-file and confirm when it is accepted.
- The fee depends on the forms in the return, not the size of the refund, and is quoted before we start.
- If a notice arrives about a return we prepared, you bring it to us. Our team includes enrolled agents admitted to practice before the IRS.
If a bad preparer already filed your return
The IRS is clear that you are accountable for the accuracy of every item on your return, even though the preparer signed it. If you think a return was wrong, act before the IRS does:
- Get a copy of the return as filed, and your IRS account and wage transcripts, so you can see what was actually reported.
- Correct it. An amended return fixes income, deductions or credits that were reported wrongly. It is far better filed by you than discovered by the IRS.
- Report the preparer on Form 14157. If the preparer filed or changed your return without your consent, or diverted your refund, Form 14157-A is the IRS’s separate process for correcting your account.
- Answer every notice by its deadline. If a balance has already been assessed, our tax resolution division handles the corrected returns and the balance together.
If you are being contacted by companies offering to fix it, read our guide to tax resolution scam calls first, and our breakdown of what tax resolution services cost before you agree to a fee.
Questions to ask before you hire one
- What is your PTIN, and will you sign my return?
- Are you an enrolled agent, CPA or attorney? If not, who represents me if there is an audit?
- How is the fee calculated, and will I know it before you start?
- Will my refund go directly to my bank account?
- Who reviews the return before it is filed?
- Are you open after April, and who answers if a notice comes?
- Can I ask questions in Spanish?
We prepare returns year-round from our office in Matthews, near Charlotte, and by video. Start with our tax preparation services page or book a consultation.
Tax preparer questions
The IRS warns about preparers who will not sign the return or enter a PTIN, base the fee on a percentage of your refund, want your refund deposited into their account, promise a larger refund than others, ask you to sign a blank form, or file from a pay stub instead of a Form W-2.
A ghost preparer is someone who is paid to prepare a return but does not sign it or enter their PTIN, as the law requires. The IRS warns that ghost preparers often promise large refunds and then disappear, leaving the taxpayer to deal with the consequences.
Ask for their PTIN and make sure it goes on your return, then look them up in the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. The directory lists enrolled agents, CPAs, attorneys and Annual Filing Season Program participants.
Not always. Anyone paid to prepare returns needs an IRS preparer number, but credentials vary. Enrolled agents are licensed by the IRS and can represent you on any tax matter, while a preparer with no credential can represent you only in limited situations or not at all.
Yes. The IRS says you are ultimately accountable for the accuracy of every item on your return, even though the preparer signs it. If a mistake is found, file an amended return and answer any notice by its deadline.
Use IRS Form 14157 to report preparer misconduct. If the preparer filed or changed your return without your consent, or diverted your refund, Form 14157-A asks the IRS to correct your account. Abusive tax schemes can be reported on Form 14242.
Sources
IRS Topic no. 254, How to choose a tax return preparer (reviewed October 7, 2026); IRS, “Choosing a tax professional” (reviewed August 21, 2026); IRS, “Understanding tax return preparer credentials and qualifications” (reviewed January 29, 2026); IRS, “PTIN requirements for tax return preparers” (reviewed October 29, 2026); IRS, “Make a complaint about a tax return preparer” (reviewed October 21, 2026); IRS news release IR-2024-96, Dirty Dozen: untrustworthy tax preparers and ghost preparers (April 5, 2024). Checked November 6, 2026. This article is general information, not tax advice for your situation.