As we head into the 2025 tax season, it’s more important than ever to be vigilant when choosing someone to help you file your taxes. The IRS continues to crack down on tax fraud, but that hasn’t stopped scammers from evolving. New tax preparer scams are targeting everyone from gig workers and independent contractors to real estate investors and Airbnb hosts.
In this post, we’ll walk you through the most common tax preparer scams to watch for in 2025, highlight emerging red flags, and explain what to do if you suspect you’ve been targeted. Whether you’re filing for the first time or have been in business for years, staying informed is your best defense.
Tax Preparer Scams in 2025
Working with a fraudulent tax preparer can expose you to more than just unnecessary fees or headaches—it can result in identity theft, lost refunds, and IRS audits that take months to resolve. Many of these scams begin with a simple promise: “We’ll get you the biggest refund possible.”
In reality, these promises can lead to inflated deductions, falsified income, or misused credits, all of which leave you legally responsible. That’s why choosing a tax preparer should never be based solely on price or speed.
Scammers know people are under pressure to file early and fast. They exploit that urgency with too-good-to-be-true promises, aggressive advertising, or referral schemes designed to build trust quickly. Knowing how to recognize those patterns can help you steer clear.
Common Red Flags to Watch Out For
Some signs are classic and haven’t changed for years. Others are newer for 2025, reflecting current tax scams spreading through social media and AI-driven fraud schemes.
Watch out if a tax preparer:
- Promises unusually large refunds without reviewing your documentation.
- Bases their fee on a percentage of your refund.
- Refuses to sign your return or enters their name as “self-prepared.”
- Asks you to sign a blank return or doesn’t give you a copy.
- Requests refund deposits to an unfamiliar or shared bank account.
- Offers to file ERC claims or “secret” credits without verifying eligibility.
And in 2025, watch for scammers claiming they can help you “opt out of IRS systems,” submit returns with AI-generated write-offs, or file “sovereign citizen tax exemption forms.” These are red flags—not legitimate tax strategies.
The Most Common Tax Preparer Scams in 2025
These are the most common tax prep scams currently going around at the time of writing.
Phantom Tax Preparers
These scammers disappear after they file (or pretend to file) your return. They may use fake names or non-existent tax IDs, and they often work out of temporary pop-up offices during tax season. Victims don’t realize something is wrong until weeks later when the IRS sends a letter or no refund arrives.
Because the IRS holds the taxpayer accountable regardless of who filed the return, you could end up owing penalties and interest even if the preparer disappears.
Inflated Refund Claims
This remains one of the most dangerous and widespread scams in 2025. Fraudulent preparers tweak numbers, invent dependents, or exaggerate deductions to generate huge refunds. The scammer takes their cut upfront—often a large percentage—and disappears.
Once the IRS audits or flags the return, the client is on the hook for the overpayment, plus penalties and interest.
Identity Theft and Fraudulent Filing
This scam has surged in 2025 due to AI-powered phishing and data scraping tools. Fraudulent preparers may collect your Social Security number, driver’s license, address, and banking details under the pretense of filing your return. Then, they file a return in your name without your knowledge and redirect the refund to themselves.
Watch out for any preparer who insists on creating your IRS online account on your behalf or who asks for credentials to log in “just to verify your info.”
ERC, AI, and Credit Scheme Abuse
One of the most troubling developments in 2025 is the rise of false Employee Retention Credit (ERC) claims and “AI deduction maximizers.” Some tax prep companies are advertising “AI-optimized tax savings” that don’t comply with IRS regulations. Others are pushing amended returns for ERC credits that the business is not eligible for.
These services often come with steep upfront fees or contingency-based pricing and can trigger major audits.
Unauthorized Refund Diversions
Some scam preparers still redirect refunds to their own bank accounts or prepaid debit cards—particularly with first-time filers who may not be familiar with refund processing timelines. In 2025, we’ve also seen refund-diversion scams that use peer-to-peer apps like Venmo or CashApp.
A legitimate preparer should never receive your refund directly. If someone suggests this, walk away.
Protecting Yourself from Tax Preparer Scams
The best way to avoid becoming a victim is to stay informed and proactive.
Even if you’re working with a preparer, you’re still legally responsible for your tax return. That means:
- Never sign a return you haven’t reviewed.
- Always verify your preparer’s PTIN (Preparer Tax Identification Number).
- Get a written quote or fee agreement before filing begins.
- Ask questions—good preparers welcome them.
- Make sure the refund is deposited into your own bank account.
- Save a full copy of your return and supporting documentation.
These precautions won’t just protect your refund—they’ll help you catch errors that could lead to bigger problems later. Keep a vigilant eye out for red flags so you don’t expose personal information, and don’t hesitate to contact the authorities if you believe a crime has been committed.
What to Do If You Suspect You’ve Been Scammed
If you think your tax preparer has acted fraudulently, start by contacting the IRS immediately. The IRS has a dedicated form—Form 14157—to report tax preparer misconduct. You may also need to submit Form 14039 if you believe your identity has been stolen.
Next, alert your bank, monitor your credit reports, and consider placing a fraud alert or credit freeze. You should also notify local law enforcement and the Federal Trade Commission (FTC), especially if you suspect stolen funds or identity theft.
Keep copies of all correspondence and file everything as quickly as possible to demonstrate that you acted in good faith.
How to Find a Qualified Tax Preparer
A good tax preparer should:
- Have a valid PTIN and verifiable experience.
- Use secure methods to collect, store, and transmit your documents.
- Charge a transparent, flat fee—not a percentage of your refund.
- Sign the return and provide you with a copy.
- Be willing to answer your questions and walk you through the process.
CPAs, Enrolled Agents (EAs), and tax attorneys have the highest credentials. But many qualified preparers without those titles still do excellent work. When in doubt, check the IRS Directory of Federal Tax Return Preparers and lean on your network for referrals.
Closing Thoughts on Tax Preparer Scams
Most tax professionals are honest, hard-working people trying to help clients stay compliant and save money. But like every industry, tax prep has its share of bad actors.
The best defense is knowledge. If someone is promising something that sounds too good to be true—it probably is. Vet your tax preparer thoroughly, and never forget that you are ultimately responsible for your return.
At Shared Economy Tax, we specialize in helping independent contractors, Airbnb hosts, and real estate investors navigate their taxes with confidence and clarity. Our firm-level expertise ensures you get the deductions you deserve—without putting your future at risk. Get started now by booking a 1-on-1 strategy session and see how much you can save.
