You trusted them. You handed over your W-2s, your 1099s, maybe even your bank login or a shoebox full of receipts, and you expected a professional to handle the math. Then the notice from the IRS arrives. Or maybe they stop answering your calls. Maybe they literally vanished with your refund. It feels like a gut punch. Honestly, finding out your tax pro is a fraud—or just dangerously incompetent—is a special kind of nightmare because the IRS still holds you responsible for what’s on that return.
But you aren't stuck. If you’re wondering how to report a tax preparer, the process is actually pretty specific, and you need to move fast. It isn't just about getting revenge; it’s about protecting your record and potentially getting the IRS to waive penalties that weren't your fault.
The IRS Form 14157: Your Main Weapon
Most people think they should just call the police. You can, but the police don't talk to the IRS. To actually flag a "ghost" preparer or a shady accountant, you need IRS Form 14157, Complaint: Tax Return Preparer. This is the foundational document.
There are two versions of this, and getting them mixed up is a common mistake.
If your preparer was just incompetent or did something unethical—like
charging a fee based on the size of your refund (which is a huge red flag)—you use the standard Form 14157. But if you suspect they actually committed fraud, like changing your bank account information to steal your refund or filing a return without your consent, you need to also file Form 14157-A. This is the "Tax Return Preparer Fraud or Misconduct Affidavit."
Don't just fill it out half-heartedly. The IRS receives thousands of these. You need to be the "squeaky wheel" with a paper trail. Attach copies of the return they gave you versus what was actually filed (if you can get a transcript). If they promised you a $5,000 refund but the IRS says you only get $2,000, that’s your evidence.
When the Preparer "Ghosts" You
A "ghost" preparer is someone who gets paid to prepare your tax return but refuses to sign it. This is illegal. By law, any paid preparer must have a Preparer Tax Identification Number (PTIN) and must sign the return they prepare for you.
If you look at your copy of the tax return and the "Paid Preparer" section is blank or says "Self-Prepared," you've been ghosted.
This is a massive red flag for the IRS. Why? Because it means the preparer is trying to avoid accountability while taking your money. If the IRS sees a pattern of these "self-prepared" returns coming from the same IP address or location, they start looking for the source. Reporting this helps them map out these predatory operations.
You should also check the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. If your "expert" isn't on there, or if they aren't a CPA, Enrolled Agent, or Attorney, they might not have the legal standing to represent you if things go south.
Is it a Mistake or Malice?
We have to be real here: sometimes tax pros just mess up. Tax law is dense. The tax code is over 70,000 pages long. A simple math error or a missed deduction isn't necessarily a crime. It’s just bad service.
However, if you see any of the following, you are dealing with misconduct:
- Fabricated Deductions: They added a "business loss" for a business you don't own.
- False Dependents: They "borrowed" a kid’s Social Security number to get you a bigger Earned Income Tax Credit.
- Redirected Refunds: The routing number on the filed return isn't yours.
- Withholding Documentation: They refuse to give you a copy of your own return.
If they refuse to give you your records, they are violating Treasury Department Circular 230. This is a big deal. They are legally required to return your original records to you, even if you haven't paid them yet (though they can keep their own work papers).
Beyond the IRS: State and Professional Boards
The IRS isn't the only sheriff in town. In fact, they might be the slowest. If your preparer is a Certified Public Accountant (CPA), you should contact your State Board of Accountancy.
CPAs are licensed at the state level. These boards take ethics violations very seriously. If a CPA is stealing from clients or acting in a way that brings discredit to the profession, they can lose their license. This often hurts a shady preparer more than an IRS fine because it ends their career entirely.
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If the person is an attorney, contact the State Bar Association.
For Enrolled Agents (EAs), you report them to the IRS Office of Professional Responsibility (OPR). EAs are "federally authorized tax practitioners" who have technical expertise in taxation and are empowered by the U.S. Department of the Treasury. The OPR handles their discipline.
The Paper Trail: What You Need to Gather
You can't just say "they lied." You need to prove it. Start a folder.
- The Engagement Letter: Did you sign a contract? What did it say they would do?
- All Communications: Save every email, text message, and a log of every phone call. If they told you "don't worry about those receipts, I'll just estimate," write down when they said that.
- Proof of Payment: How did you pay them? Check? Credit card? If you paid in cash and didn't get a receipt, that’s a tough lesson, but try to find a bank withdrawal that matches the date.
- IRS Transcripts: Go to the IRS website and get a "Tax Account Transcript." Compare it to the copy of the return the preparer gave you. If the numbers are different, you have the "smoking gun."
What Happens to You After You Report Them?
This is the part no one likes to hear. Even if you report the preparer, you are still responsible for the tax owed. If the preparer padded your deductions and you actually owe $4,000 more than you paid, the IRS is going to want that $4,000.
However—and this is the "silver lining"—reporting them can help you with Penalty Abatement. If you can show that you acted in good faith and the error was due to the "reasonable cause" of a fraudulent professional, the IRS might waive the late payment or underpayment penalties. You'll still owe the interest and the tax, but the penalties can be thousands of dollars you might not have to pay.
Practical Next Steps
If you realize you’ve been scammed or misrepresented, do not wait. Tax issues do not age like wine; they age like milk.
- Step 1: Download and fill out IRS Form 14157. Be clinical and boring in your description. Stick to the facts.
- Step 2: If money was stolen, fill out Form 14157-A.
- Step 3: Contact your local police department if your identity was stolen or if your refund was physically diverted to an account that isn't yours. Get a police report number; the IRS loves those.
- Step 4: File a complaint with the Federal Trade Commission (FTC) via IdentityTheft.gov if your SSN was used improperly.
- Step 5: Find a new, reputable tax professional—preferably an Enrolled Agent or a CPA—to file an amended return (Form 1040-X). This "fixes" the record before the IRS hits you with a formal audit.
Don't let the fear of "getting in trouble" stop you from reporting a bad actor. The IRS is much more lenient with taxpayers who come forward voluntarily to report a fraudulent preparer than they are with taxpayers they catch during a random audit. Basically, being the one to tell on the preparer puts you in the "victim" category rather than the "conspirator" category.
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Check the status of any professional you hire in the future on the official IRS PTIN directory. If they aren't there, walk away. It isn't worth the risk.