Red flags when choosing a tax preparer
Most warning signs that a tax preparer is unqualified, unethical, or potentially fraudulent are visible before you hire them. A preparer who cannot produce a PTIN, who sets fees as a percentage of your refund, or who encourages you to sign a blank return is not someone you want preparing documents that carry your signature and your Social Security number. The following red flags are documented by the IRS as common indicators of preparer misconduct.
No PTIN or refusal to provide one
Every paid preparer in the United States is required by federal law to obtain and display a Preparer Tax Identification Number (PTIN). If a preparer cannot give you their PTIN, or declines to do so, they are either operating illegally or have had their PTIN revoked. Verify any PTIN you receive using the IRS directory at irs.gov/tax-professionals before sharing your documents.
Fees based on the size of your refund
Any preparer who sets their fee as a percentage of your refund has a direct financial incentive to inflate your refund — which means inflating deductions or credits that may not be accurate. The IRS and most professional bodies explicitly prohibit this fee structure. A transparent fee structure is flat-rate by form type, or hourly.
If a preparer offers you a large refund before they have even reviewed your documents, treat that as the same signal: they are not working from your facts.
Promises of unusually large refunds
Refund size is determined by your income, withholding, and the deductions and credits you legitimately qualify for. Any preparer who promises a larger refund than you have received in prior years — without having reviewed your documents — is either making a statement they cannot support, or planning to fabricate entries to produce it.
The IRS publishes average refund data by income level. A refund that is dramatically higher than what other people in your income range receive is a sign that something on the return may be incorrect.
Refusal to sign the return or include their PTIN
A paid preparer is required by IRS rules to sign every return they prepare and to include their PTIN. A preparer who asks you to sign a blank return (so they can fill it in later), who leaves the preparer signature line blank, or who asks you to claim you prepared the return yourself is transferring the legal risk to you while they accept the fee. Do not sign any return that does not carry the preparer's name, PTIN, and signature.
No verifiable credentials
Ask every prospective preparer what professional credential they hold and how you can verify it. If they cannot name a credential, or they name one you cannot verify through a public register, you have no way to confirm their qualifications or hold them accountable through a licensing body.
- Enrolled agents: verify at irs.gov/tax-professionals/verify-the-status-of-an-enrolled-agent
- CPAs: verify at cpaverify.org or through the state board of accountancy
- Attorneys: verify through the state bar association
A preparer with no verifiable credential is not automatically incompetent, but you lose the accountability mechanism that a professional license provides.
Encouraging you to claim deductions or credits you do not qualify for
A preparer who suggests deductions you have never heard of, or who asks leading questions designed to get you to claim expenses you did not incur, is not helping you — they are exposing you to accuracy penalties and potential fraud charges. If you are audited, the IRS holds you responsible for the contents of your return regardless of who prepared it.
Common areas where this surfaces: home office deductions, business meals and entertainment, unreimbursed employee expenses, and charitable contribution valuations.
Cash-only payment or no receipt
A professional preparer should provide a written invoice and accept standard payment methods. Cash-only payment with no receipt makes the transaction harder to document and is inconsistent with how licensed professionals typically operate.
Summary checklist: things to confirm before signing
- Preparer has a current PTIN confirmed in the IRS directory
- Fees are stated in writing as a flat rate — not a percentage of refund
- Preparer will sign the completed return and include their PTIN
- Preparer has named a verifiable credential (enrolled agent, CPA, or attorney)
- Preparer has not promised a specific refund amount before reviewing your documents
- Preparer has not asked you to sign a blank or incomplete return
Find a verified professional
Browse the directory on TaxProsRated to search for credentialed tax professionals by location. Each listing includes credential information you can verify independently against the IRS directory, state boards of accountancy, or state bar associations. You can also verify a pro against your country's recognized professional body before engaging their services.
Sources
- IRS guidance on choosing a tax professional and avoiding preparer fraud: irs.gov/tax-professionals/choosing-a-tax-professional
- IRS PTIN directory: irs.gov/tax-professionals
- IRS Enrolled Agent verification: irs.gov/tax-professionals/verify-the-status-of-an-enrolled-agent
- IRS "Dirty Dozen" tax scams (preparer fraud section): irs.gov/newsroom/dirty-dozen
- CPA Verify: cpaverify.org