IRS Lacks Data and Coordination to Address Ghost Tax Preparers, GAO Finds

Ghost preparers are paid tax preparers who do not identify themselves on tax returns. They may leave identifying information off to file fraudulent returns, steal refunds, and steal identities. Courts have ordered individual ghost preparers to pay millions in restitution, but the total effect is likely greater because ghost preparers are difficult to detect.

IRS maintains some data on identified ghost preparers, but the systems used to track cases and outcomes are not connected and have limitations. As a result, IRS does not know how many ghost preparers it has identified, investigated, and addressed. Better understanding existing data would help IRS direct enforcement resources and protect taxpayers.

IRS identifies and addresses ghost preparers through data analysis, referrals, taxpayer education, and enforcement actions. However, these efforts are fragmented across six offices and IRS is missing opportunities to share information and better address risks. A comprehensive, coordinated preparer strategy could help IRS align resources with risks.

IRS has not developed measurable objectives or performance goals for addressing ghost preparers. Defining objectives, goals, and performance measures could help IRS assess whether its efforts are reducing ghost preparer activity and adjust its strategy and allocate resources more effectively.

Paid tax preparers prepared more than half of all tax returns in fiscal year 2025. Ghost preparers may hide their identities to avoid accountability and leave taxpayers responsible for inaccurate or fraudulent returns they prepare.

GAO reviewed federal court cases, IRS documentation and data. GAO compared IRS efforts to leading practices for evidence-based policymaking and consumer education planning. GAO also interviewed IRS and Department of Justice officials and stakeholder groups.