Who Prepared Your Tax Return? What a New Federal Report Reveals About Uncredentialed Preparers

More than half of individual taxpayers in the United States pay someone to prepare their return. A new federal report shows that a significant share of those preparers operate outside the rules the IRS has in place, and that the consequences can reach the taxpayer who signed the return.

The report, released on October 23, 2026 by the Treasury Inspector General for Tax Administration (TIGTA), concludes that the IRS has limited authority to regulate preparers who hold no professional credential. That gap is linked to misconduct and tax fraud, according to coverage by Accounting Today.

What the Report Found

• Invalid PTINs at scale. Last year, more than 38,000 preparers used noncompliant Preparer Tax Identification Numbers, such as expired PTINs, to prepare over 2 million returns.
• Refund-only activity. Nearly 12,000 of those preparers filed around 95,000 individual returns that only requested refunds, totaling close to $600 million. TIGTA identified this pattern as a risk.
• Overstated withholding schemes. For tax years 2023 and 2024, returns showing signs of an overstated withholding scheme claimed about $740 million in refunds. Roughly 84% of the preparers behind them had no credentials.
• Ghost preparers. Some preparers do not sign the returns they prepare or include their PTIN. Returns linked to these preparers, with the same warning signs, claimed approximately $179 million in refunds.
• Gaps in PTIN controls. TIGTA found 73 PTINs issued or renewed for deceased individuals and prisoners between 2010 and 2025, and 691 IRS employees with active PTINs.

The IRS agreed to finalize a data-driven strategy to oversee return preparers. That strategy will address penalties, scheme promoters and ghost preparers.

Why This Matters to You as a Taxpayer

The person who signs a tax return is responsible for its content, even when someone else prepared it. If a preparer inflates withholding, claims credits you do not qualify for or omits income, the IRS will look to you for the tax, the interest and any penalties.

In practice, a return prepared by an unqualified or dishonest preparer can lead to:

• A delayed or denied refund
• IRS notices requesting documentation
• An examination of the return
• Accuracy-related penalties and interest on any additional tax owed

Ghost preparers create an additional problem. Because their name does not appear on the return, the taxpayer has no record of who prepared it and no professional to answer for it when the IRS asks questions.

How to Verify a Preparer Before the Next Filing Season

The IRS publishes guidance on choosing a tax professional, and the report reinforces why it matters. Before you hand over your documents, confirm these points:

1. The preparer signs the return and includes a valid PTIN. Every paid preparer is required to do this.
2. The preparer holds a professional credential. CPAs and enrolled agents are licensed or authorized and can represent you before the IRS if questions come up after filing.
3. The credential can be verified. The IRS maintains a public Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.
4. The fee is not a percentage of your refund. Fees tied to the size of a refund create an incentive to inflate it.
5. Your refund goes to your own account. It should never be deposited into an account controlled by the preparer.
6. You review the return before signing it. Never sign a blank or incomplete return.
7. The preparer is available after April. Notices and examinations often arrive months after the return is filed.

If You Have Concerns About a Return Already Filed

If you used a preparer who did not sign your return, or if you see figures you do not recognize, act before the IRS does. A CPA can review the filed return, identify errors and determine whether an amended return is appropriate. Correcting a return on your own initiative is generally viewed more favorably than waiting for the IRS to find the issue.

If you have already received an IRS notice, respond by the deadline shown on the letter. Upfront CPA provides IRS audit representation and notice response under a power of attorney, and can evaluate whether penalty relief is available in your case.

How Upfront CPA Approaches Tax Compliance

Every return and every IRS matter at Upfront CPA is handled by credentialed professionals. Our clients know who prepared their return, can verify our credentials and have a direct point of contact if the IRS has questions. We work with clients in Florida and across all 50 states through virtual consultations. Learn more about our individual tax advisory services.

Related reading: The IRS and the Department of Justice have also launched a national tax fraud enforcement surge. Read our analysis of what business owners should review before year-end.

Have questions about a return or an IRS notice? Schedule a consultation with our CPA team.

Sources

• IRS tries to crack down on noncompliant tax preparers, Accounting Today, October 23, 2026
• TIGTA report on IRS oversight of return preparers, Treasury Inspector General for Tax Administration, October 2026