Treasury Watchdog: Ghost Tax Preparers Tied to $179 Million in Refund Claims, 38,000 Preparers Used Noncompliant ID Numbers on 2 Million Returns
The Treasury Inspector General for Tax Administration (TIGTA) issued an evaluation report on October 21, 2026, released publicly on October 23, finding systemic gaps in Internal Revenue Service (IRS) oversight of paid tax return preparers. In processing year 2025, more than 38,000 preparers used a noncompliant Preparer Tax Identification Number (PTIN) — including expired or otherwise inactive numbers — to prepare over 2 million tax returns. Nearly 12,000 of them prepared only refund-claiming returns, about 95,000 individual returns claiming nearly $600 million in refunds, a pattern the report says presents a higher risk.
Between 2010 and 2025, the IRS also issued or renewed PTINs for ineligible people, including 73 issued to deceased individuals and prisoners. At the time of the review, 691 IRS employees held active PTINs and more than 90 may have prepared returns for compensation, which federal rules prohibit for IRS employees; the IRS had no process to prevent employees from obtaining a PTIN.
The largest dollar figure involves an overstated-withholding scheme: for tax years 2023 and 2024 combined, returns tied to the scheme requested about $740 million in refunds, and about 84 percent of the preparers involved were uncredentialed. Some were ghost preparers — paid preparers who do not sign returns or include a PTIN — whose returns showed the same potentially fraudulent characteristics and claimed about $179 million. A Journal of Accountancy breakdown of the report counted 47 potential ghost preparers linked to 6,352 tax-year 2023 returns requesting more than $94 million, and 65 linked to 6,444 tax-year 2024 returns requesting more than $85 million; overall the scheme involved 2,044 preparers and 78,530 returns over two years.
More than half of individual taxpayers used a paid preparer in fiscal year 2024, the report notes, yet IRS authority to regulate uncredentialed preparers is limited. TIGTA made one recommendation — that the IRS finalize and implement its data-driven return preparer strategy, covering preparer outreach, penalties, employee PTIN policy, scheme promoters and ghost preparers — and the IRS agreed.
A separate Government Accountability Office report this month (GAO-27-108176) likewise found that the IRS systems tracking ghost preparer cases are not connected, that the agency cannot reliably count how many it has identified or addressed, and that its efforts are fragmented across six offices without measurable goals; the IRS agreed with GAO's three recommendations. The Senate has unanimously passed the Taxpayer Assistance and Service Act, which would expand IRS oversight of paid preparers; the bill awaits House consideration.
Source: GSM · USA (original Chinese edition)
Photo: 佐治亚州 Athens 一家收费报税服务门店（资料图，与报告所涉个案无关）。照片：Harrison Keely，CC BY 4.0。 / A paid tax preparation storefront in Athens, Georgia (file photo; not connected to any case in the report). Photo: Harrison Keely, CC BY 4.0.
