$12.5B
FTC-reported fraud losses in 2024
FTC says consumers reported losing $12.5 billion to fraud in 2024.
tax preparer fraud scam
A dishonest or unlicensed tax preparer inflates deductions, fabricates credits, or files fraudulent returns to inflate refunds — then takes a cut or steals the refund entirely.
“IRS scam”
↑ 193%Key indicators
Usually targetsTaxpayers
Often hitsTech workers and developers
Common regionUnited States
Last updated2026-04-04
Estimated impact
$3.6K
median reported loss
Typical range$240 – $30K
Recovery rate~12%
Annual reports33,000
Scam breakdown
1
The preparer advertises big refunds to attract clients, often targeting low-income communities.
2
They fabricate deductions, credits, or dependents on the return to inflate the refund amount.
3
The inflated refund is deposited into the preparer's account or they demand a large percentage as their fee.
What to do first
Verify your tax preparer has a valid PTIN by searching the IRS Return Preparer Office directory.
Related terms
ghost tax preparerfraudulent tax return preparerrefund fraud preparerIRS and tax scamsWebsiteSurgingTaxpayersSelf-employedImmigrantsTech workers and developersImmigrants and visa holdersOnline shoppersUnited Statesghost tax preparerfraudulent tax return preparer
Real-world example
How this scam plays out in practice
Based on reported patterns. Names and details are illustrative.
The setup
Sarah, 35, a taxpayers, encountered what appeared to be a legitimate irs and tax scams situation while using Website. The preparer advertises big refunds to attract clients, often targeting low-income communities.
Step 2
What happened next was calculated: They fabricate deductions, credits, or dependents on the return to inflate the refund amount.
Step 3
The pressure escalated quickly: The inflated refund is deposited into the preparer's account or they demand a large percentage as their fee.
The outcome
Sarah realized something was wrong when preparer promises an unusually large refund before reviewing your documents. By that point, significant damage had already been done — money sent, personal information shared, or trust exploited.
The lesson
Verify your tax preparer has a valid PTIN by searching the IRS Return Preparer Office directory. Sarah's experience shows why preparer promises an unusually large refund before reviewing your documents and preparer refuses to sign the return or provide a preparer tax identification number (ptin) are the clearest early warning signs.
How to identify it
- Preparer promises an unusually large refund before reviewing your documents
- Preparer refuses to sign the return or provide a Preparer Tax Identification Number (PTIN)
- Fees are based on a percentage of the refund rather than a flat rate
- Pause before paying, clicking, or sharing information. Scammers rely on speed.
- Verify the sender, company, or agency using a phone number or website you already know is legitimate.
- Treat secrecy, urgency, and off-platform payment requests as strong scam signals.
What to do now
- ✓Verify your tax preparer has a valid PTIN by searching the IRS Return Preparer Office directory.
- ✓Never sign a blank or incomplete tax return.
- ✓Report suspected preparer fraud to the IRS using Form 14157.
What to save before reporting
- ✓Save the message, profile, phone number, email, or URL that was used.
- ✓Keep payment confirmations, receipts, and account alerts before you dispute or delete anything.
- ✓Write down the timeline while the details are still fresh.
How big is this problem
You are not alone — this scam affects millions of people.
These numbers come from government agencies and official reports. If you have been affected, know that this is a widespread problem — not something that only happens to careless people.
FTC 2024 fraud losses
Imposters
Most common FTC fraud category in 2024
FTC says imposter scams remained the most commonly reported fraud category in 2024.
History and evolution
- This scam family tends to persist because the social-engineering pressure works even when the exact scripts, platforms, and payment methods change.
- The specific packaging evolves over time, but the core pattern usually stays the same: create urgency, control the channel, and push action before verification.
- The IRS requires all paid tax preparers to have a PTIN and warns taxpayers that they are legally responsible for everything on their return, even if someone else prepared it.
Recovery and follow-up
- ✓Save the messages, receipts, account alerts, and transaction details before you block or delete anything.
- ✓Report the scam through the official platform or government channel that best matches where it happened.
- ✓Verify your tax preparer has a valid PTIN by searching the IRS Return Preparer Office directory.
- ✓Never sign a blank or incomplete tax return.
- ✓Report suspected preparer fraud to the IRS using Form 14157.
Why this pattern keeps working
Even when the story changes, most scams still use the same pressure pattern: urgency, authority, and a request to move money or data fast.
The IRS requires all paid tax preparers to have a PTIN and warns taxpayers that they are legally responsible for everything on their return, even if someone else prepared it.
FTC Consumer Sentinel 2025
Where to report it
If you have been targeted by this scam, reporting it helps authorities track the pattern and protect others. United States has dedicated agencies that handle fraud reports.
ReportFraud.gov
Federal Trade Commission
Central U.S. consumer fraud reporting portal.
File an IC3 complaint
FBI Internet Crime Complaint Center
FBI portal for internet-enabled crime reports.
Start identity theft recovery
IdentityTheft.gov
Official U.S. identity theft recovery plan builder.
Explore further
Understand the bigger picture
Who is most at risk
Who this scam targets
Primary targets
Taxpayers, Self-employed, Immigrants
Geographic concentration
United States
Primary channel
Website — IRS and tax scams
Why this group is vulnerable
Taxpayers are particularly vulnerable because this scam exploits trust in familiar brands, authority figures, and time-sensitive decisions. The rapid increase in reports suggests that awareness among this demographic remains low.
Sources and methodology
How we verify this information
OpenScam tracks scam patterns using a combination of government consumer protection databases (FTC, IC3, Action Fraud), platform-specific fraud reports, and verified consumer complaint data. Each entry is cross-referenced against at least two independent sources before publication.
Severity ratings are based on financial impact potential, reversibility of damage, and volume of reports across multiple reporting channels. Trend velocity reflects the rate of change in report volume over the most recent 90-day window.
This page was last verified on 2026-04-04. Red flags, recovery steps, and reporting resources are reviewed quarterly against current agency guidance.
Evidence and indicators
- The IRS requires all paid tax preparers to have a PTIN and warns taxpayers that they are legally responsible for everything on their return, even if someone else prepared it.
Source notes
- FTC Consumer Sentinel 2025
Frequently asked questions
Common questions about tax preparer fraud scam
How does the tax preparer fraud scam work?+
The preparer advertises big refunds to attract clients, often targeting low-income communities. They fabricate deductions, credits, or dependents on the return to inflate the refund amount. The inflated refund is deposited into the preparer's account or they demand a large percentage as their fee.
What are the warning signs of tax preparer fraud scam?+
Preparer promises an unusually large refund before reviewing your documents Preparer refuses to sign the return or provide a Preparer Tax Identification Number (PTIN) Fees are based on a percentage of the refund rather than a flat rate
What should I do if I encounter tax preparer fraud scam?+
Verify your tax preparer has a valid PTIN by searching the IRS Return Preparer Office directory. Never sign a blank or incomplete tax return. Report suspected preparer fraud to the IRS using Form 14157.
Who is most at risk for tax preparer fraud scam?+
This scam primarily targets Taxpayers, Self-employed, Immigrants. It is most commonly reported in United States and typically appears on Website.
Is tax preparer fraud scam getting worse?+
tax preparer fraud scam is currently surging — reports are increasing rapidly. It has been reported across US. Last updated 2026-04-04.
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Help someone avoid this scam.
Scammers succeed because people do not talk about it. If you or someone you know has been affected, there is no shame in it — it happens to millions of people every year. Share this page with friends and family so they know what to look for.
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