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I see it's just about the top of the hour. For those of you who are joining, welcome to today's webinar, Choosing a Paid Tax Return Preparer and Avoiding Ghost Preparers. I'm glad you're joining us today.

My name is Joe McCarthy, and I will be your moderator for today's webinar, which is slated for 60 minutes. Before we begin, if there is anyone in the audience that's with the media, please send an e-mail to the address on the slide. Be sure to include your contact information and the news publication you're with.

Our Media Relations Specialist and Stakeholder Liaison staff will assist you and answer any questions you may have. As a reminder, this webinar will be recorded and posted to the IRS video portal in a few weeks. This portal is located at We hope you won't experience any technology issues, but if you do, this slide shows helpful tips and reminders. We posted a technical help document that you can download from the materials section on the left-hand side of your screen. It provides the minimum system requirements for viewing this webinar along with some best practices and quick solutions. If you have completed and passed your system check and you are still having problems, try one of the following. The first option is to close the screen where you're viewing the webinar and relaunch it. The second option is to click on the settings, I'm sorry, click on the settings on your browser viewing screen and select HLS. You should have received today's PowerPoint in a reminder e-mail, but if not, no worries, you can download it by clicking on the materials dropdown arrow on the left-hand side of your screen as shown on this slide. Closed captioning is available for today's presentation. If you're having trouble hearing the audio through your computer speakers, please click the closed captioning dropdown arrow located on the left-hand side of your screen. This feature will be available throughout the webinar. If you have a topic specific question today, please submit it by clicking the ask question drop down arrow to reveal the text box. Type your question in the text box and click send. This is very important. Please do not enter any sensitive or taxpayer specific information in the ask questions box. Again, welcome and thank you for joining today's webinar. Before we move along with our session, let me make sure you're in the right place.

Today two of my coworkers from Communication and Liaison will share information about Choosing a Tax Return Preparer and Avoiding Ghost Preparers. This webinar is scheduled for approximately 60 minutes. Now let me introduce today's speakers the pair Philip Yamalis and Richard Furlong are here. Both work with tax professionals and small business owners in their respective areas providing outreach and education and identifying ways the agency can be more responsive to customers' needs. Now, I'll turn it over to Philip and begin our presentation. Philip.

PHILIP YAMALIS: Thank you, Joe, and thanks for having me. It's so good to be with you here today. So, before we get started with our webinar, we want to present our objectives for today's presentation. Our objectives are first to provide some helpful tips that can help you, your family members, and your friends to choose an honest, reputable, and competent tax preparer that meets all of your needs and ensures that the tax return filed with the Internal Revenue Service is, of course, accurate and complete. The second objective that we'll cover today is to explain the various types of paid preparers who offer their services to the public during this tax season.

Third, we'll discuss an tool called the IRS Directory of Federal Tax Return Preparers, and we'll touch on how you can use this online tool to identify a preparer's credentials. Continuing with our objectives, we'll discuss ghost tax return preparers. We'll define this and tell you why taxpayers should always avoid using ghost preparers to assist in the preparation of any type of tax return. Then we'll continue by reviewing the IRS form to process, the IRS form and process, I should say, to make a complaint about a tax return preparer who is unethical or unqualified to prepare tax returns. And then finally, we'll explain the third-party authorization process in case you need to have a tax professional obtain information from the IRS for you or assist you with a notice or assist you with an exam or even a collection matter. So, having completed our objectives, let's go ahead and turn it over to my favorite colleague, Richard Furlong from Philadelphia, to share some wonderful tips on choosing a tax preparer. Richard, it's all yours. RICHARD FURLONG: Thank you so much, Philip. Good day everyone. It's a pleasure to be with you today. So, let's start with some basic tips. In the process of choosing a qualified tax preparer. Obviously as you would do when deciding on any professional, such as an attorney, doctor, or dentist, you want to check on the preparer's qualifications and their history. So, for example, you'd ask what type of tax returns does the preparer complete each year? How long has the preparer been in the business of preparing returns? Can a prospective preparer provide you with references? Does the preparer perhaps have a website or even a social media account that you can check out? You always want to ask your prospective preparer about his or her service fees. One should always, always avoid preparers who base their fees on a percentage of the refund or perhaps who boast that they obtained larger refunds than their competition. When inquiring about a preparer's services and fees, don't provide the tax preparer with any tax documents up front, such as your Social Security number and other information, before you are comfortable that this is going to be the right preparer to provide you a competent, ethical service in the preparation of your tax return.

Unfortunately, we at the IRS have seen some unscrupulous preparers who take information and documents that have been provided to them and then improperly use this information to file tax returns without the taxpayer's permission. Avoid these preparers no matter what they promise to you. Ask your tax return preparer if they will electronically file your return. Taxpayers should make sure preparers who do taxes for more than ten clients generally must file those tax returns electronically. And you should know that IRS has been processing electronically filed returns for many, many years, and we have safely processed literally billions of e-filed tax returns over the years. You also want to make sure that the preparer is available if you have any follow-up questions after your return is filed. Taxpayers on occasion may need to contact the preparer after the April 15th due date. So, you want to avoid those fly-by-night preparers who simply disappear after they prepare your return and take your payment. Good preparers will ask to see all of your records and receipts in order to prepare your tax return.

They will ask questions to figure the total income, eligible deductions that you might take, tax credits, et cetera. Taxpayers should not use a preparer who will e-file their return using their last pay stub instead of the form W-2. Again, this is against IRS electronic filing rules for paid preparers. So, moving on to some other basic tips. Never, please never sign a blank tax return. Never use a tax preparer who asks you to sign a blank tax form. Indeed, this is a violation of the rules for federal tax preparers. And you want to review your return completely before signing it. Ask questions if something is not clear. That is your right. All taxpayers should feel comfortable with the accuracy of their return before they sign it. They should also make sure that the refund goes directly to them if they're claiming a refund, and most people do claim a refund. You don't want to have that refund go to the preparer's bank account. So please, please, please review the routing number and the bank account number on the completed return to be sure that it is your bank account into which the refund will be directly deposited.

The third bullet says, you always want to avoid what we refer to as ghost preparers. A ghost preparer is someone who you pay to prepare your tax return and then does not sign that return.

We are going to have much more to say about ghost preparers later in the presentation. We will also have much more to say about the preparer tax identification number, or PTIN. By law all preparers must have a valid preparer tax identification number, or Philip and I will refer it as PTIN. By law the preparers must sign their return and include their PTIN for all tax returns for compensation and have filed with the Internal Revenue Service. And also, taxpayers want to keep copies of their tax return prepared by their paid preparer. You might want a copy of your return, for example, in a future year, you use the services of a new preparer. You might also need a copy of your tax return as filed for other purposes, such as student financial aid or perhaps to obtain a mortgage or a loan. And then later in our presentation we will discuss the forms and procedures to report preparers to the IRS. And with that, let me turn it back over to Philip. PHILIP YAMALIS: Thank you, Rich. That's an awesome conversation about how to choose a tax preparer.

Much appreciated. Let's continue, as you had indicated, you had mentioned that any tax professional with an IRS preparer tax identification number is authorized to prepare federal tax returns, and that they need to have this PTIN. However, tax professionals having different levels of skills, education, and expertise exist that have a PTIN; right? An important difference in the types of practitioners is their what we call representation rights before the Internal Revenue Service. There really are two different types of representation rights that a tax preparer can have. And those representation rights include unlimited rights as well as limited rights. Let's take a look now at the unlimited representation rights. So enrolled agents, certified public accountants, attorneys, these are preparers that have unlimited representation rights before the Internal Revenue Service. Tax professionals with these specific credentials may represent their clients on any, and I mean any matters before the Internal Revenue Service, including examinations or a standard audit, payment and collection issues, as well as appeals or protests with the Internal Revenue Service independent Office of Appeals. So, this next slide shows us three categories of tax professionals who have the unlimited representation rights that I just discussed. As we said on the previous slide, the tax professionals with any of these credentials that may represent their clients on any matters. So, attorneys, for example, these are individuals listed by State courts, the District of Columbia, or their designees, such as a State Bar Association or State Bar. Generally, they have earned a degree in law, right, as an attorney. They have passed the bar exam. Attorneys generally have an ongoing continuing education requirement as well as a professional character standard that they must abide by. Attorneys may offer a wide range of services. However, as you know, some attorneys specialize in tax preparation and planning. The next credential that we see there, or the next type of credential that has unlimited representation rights is the Certified Public Accountant, otherwise known as a CPA; right. Again, these are professionals who are licensed by state boards, the District of Columbia as well as U.S. territories. Certified Public Accountants and passed a uniform CPA exam. They've completed an active study in accounting at a college or a university, and they also meet the experience and good character requirements established by their respective State Boards of Accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of accounting, of continuing education in order to maintain their active CPA license. CPAs may offer a range of services just like attorneys, but some CPAs specialize in tax preparation and planning. Finally, there are Enrolled Agents. They are licensed by the Internal Revenue Service. Enrolled Agents are subject to a suitability check, and they must pass a three-part special enrollment examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, in individual and business tax return preparation, as well as representation before the IRS.

Enrolled Agents must complete 72 hours of continuing education every three years. Now, remember that each of these three categories of return preparers must have the preparer tax identification number, or PTIN which RICH alluded to, and that must be on each return that they prepare and is filed with the Internal Revenue Service. So, with that, let me go ahead and turn it back over to Richard to discuss the other categories of return preparers with limited representation rights.

Take it away, Richard. RICHARD FURLONG: Phil, thank you very much. That was a great discussion of the three categories of what we refer to as credentialed tax preparers. So, now I'm going to turn the discussion and share some information on non-credentialed preparers. Again, non-credentialed preparers are those who are not Enrolled Agents, Certified Public Accountants, nor attorneys. So preparers without one of the credentials just discussed by Philip, they have only limited representation rights before the IRS. They may only represent clients whose returns they prepared and signed, but only before Revenue Agents. Revenue Agents are the IRS employees who examine or audit tax returns. These non-credentialed preparers can represent their clients before Customer Service Representatives, and similar employees of the IRS along with employees of the Taxpayer Advocate Service. However, the non-credentialed preparers cannot represent clients whose returns they did not prepare, and they cannot represent clients regarding IRS appeals matters or collection issues even if they did prepare the return in question. Now, there are two types of return preparers I'm going to discuss. The first type is indicated on the slide, and this refers to a program that we've had for several years called the Annual Filing Season Program, or the acronym is AFSP. Now, this is a voluntary program, and it recognizes the efforts of many tax return preparers who are generally not attorneys, nor CPAs, nor enrolled agents. We at the IRS designed the Annual Filing Season Program to encourage those non-credentialed preparers to continue their tax education each year and prepare for the filing season before tax season gets underway. So, the IRS will issue an Annual Filing Season Program Record of Completion to return preparers who obtain a certain number of continuing education hours in preparation for a specific tax year. And finally, remember, and again, it bears repeating as we will throughout the webinar, all preparers of federal tax returns including the Annual Filing Season Program participants must have a valid Preparer Tax Identification Number, PTIN, for the current year.

Now, moving on, there are non-credentialed tax return preparers who have the active PTIN but do not have the professional credentials mentioned by Philip, such as an EA, CPA, or attorney license, and there are non-credentialed preparers who do not participate in the Annual Filing Season Program that I just discussed. Now, these individuals are only authorized to prepare tax returns. Beginning several years ago, on January 1st of 2016, the only authority that these non-credentialed preparers had is that authority to prepare tax returns. These non-credentialed tax preparers do not have the authority to represent clients before the IRS, except regarding certain returns that they prepared and filed by December 31st of 2015, over seven years ago. However, these non-credentialed preparers may be able to assist their clients on any current year processing issues involved with your tax return if, and only if you designate them as the third-party designee on page two of your form 1040. Now, the Third-Party Designee authority, that is limited to the specific tax form and the specific tax period of the return and is limited to issues involving the processing of that specific return. And the third-party designee status on the tax return will expire on the one year anniversary from the due date of the return regardless of any extension dates. And I'll have a little bit more to say later about the third-party designee status. So, with that, I'm going to turn the microphone back to my colleague Philip.

PHILIP YAMALIS: Thanks colleague Richard. I appreciate that. So now on this slide we want to share with you a snapshot of the web page on which contains our Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. I saw a question that came in, do you have a directory? Here it is, It's a searchable directory, and it's intended to help taxpayers choose a tax return preparer by providing a listing of preparers in your area who currently hold the professional credentials that we talk about recognized by the Internal Revenue Service, or who hold that Annual Filing Season Program Record of Completion that Rich just spoke about. Now, not only do you have this directory, but you could check the directories that professional organizations offer that many tax preparers belong to. Now, please note that the attorney and CPA credentials, they're self-reported to us to the Internal Revenue Service. The IRS verifies that attorney and CPA credentials before including them in the directory, but situations might exist where a credential subsequently becomes invalid after verification. Right. Users should rely on the source of the credential, for example, the State Board of Accountancy or State Bar and not this Directory for official current status.

Additionally, the IRS does not endorse, we do not endorse any specific preparer or credential over another, and a listing in this directory does not represent an IRS endorsement for specific tax preparers. Now, continuing, you can check the preparer's history by asking your local Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, again, check with the local State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, come to the web page and you search for Verify Enrolled Agent Status. Verify enrolled agent status, to check the IRS directory I discussed on the previous slide. There's another way to verify whether someone who claims to be an IRS Enrolled Agent, to verify their credential. You may e-mail a request for Enrolled Agent status verification directly to the IRS by sending that request to Let me repeat this address to verify an Enrolled Agent credential with the Internal Revenue Service. Again, that e-mail and When you make that request, we ask that you include the following information in your request, and that would be the first and last name of the person you're trying to verify, the complete address of the enrolled agent, their enrolled agent number if it's available. Also note that to reduce the likelihood of a verification error, please provide as much of the information that you have available in the request. Now, this e-mail address that I gave you, this mailbox is not for IRS employee verification. It is for verification of Enrolled Agent status. Now, it is the policy of our IRS Office of Enrollment to answer any inquiries regarding the Enrolled Agent within 72 hours. So, I do want to mention, however, with unanticipated operational demands as we have today with COVID, that may result in a delay in responding. So, be patient if that does occur. Now, with that, let me go ahead and turn the microphone back over to Richard to discuss some things that you should keep in mind when reviewing your tax return. Richard. RICHARD FURLONG: Thank you, Philip. And that was a great discussion of our directory which I would hope that all of the attendees would check out and share that information, because we think that's a great tool to check on the current year PTIN holders and any credentials they might have. So, thank you, Philip. So, let me go on and reinforce some of the areas that you want to review your tax return before signing it. So to begin, we'll mention, it bears repeating that you never want to sign a blank tax return presented to you by your tax preparer. Remember, a reputable, ethical tax preparer will never ask a client to sign a blank tax return before completing and preparing that client's return. So, then you want to review everything on the return, and it's your right to ask the preparer about any items on the return that are not clear to you. Why did they put that dollar amount there for a deduction or for income? And why is it on a specific line? All taxpayers should feel comfortable with the accuracy of their tax return before they sign it. And you also want to make sure that, again, any refund being claimed on your tax return will go directly to your bank account, not to the preparer's bank account, and make sure the numbers are correct. Sometimes we've seen bank account information where the numbers are transposed, just in error, and that can delay getting that refund to the taxpayer. So, make sure that the completed return matches exactly an open current bank account that you have along with the bank routing number. And then remember, that you, the taxpayer, are legally responsible for the accuracy of all entries made on your tax return, including any related schedules, forms, and supporting documentation. And this remains true that you are responsible for the accuracy of your return whether or not it is prepared by you, the taxpayer, or by a return preparer. Now, let me move on to ghost preparers. So, how does the IRS define a ghost preparer? He is one who charges a fee to prepare a client's tax return and does not sign it. So, as a result, the tax return coming into IRS appears to be self-prepared when filed with us. Now, the IRS reminds taxpayers, again, to avoid these ghost tax return preparers because their refusal to sign your return could potentially cause a frightening array of problems. It's important to file a valid, accurate tax return, because again, you the taxpayer, are ultimately responsible for that return.

Now, the ghost return preparers get their scary name because they don't sign the return that they prepare. So, like a ghost, they try to be invisible to the fact that they've prepared the tax return. They may print out their client's tax return, have the client sign the tax return, and then mail it to the IRS. Or for e-filed returns, the ghost preparer will prepare the return, but refuse to digitally sign the return as the paid preparer. Now, as was mentioned earlier, anyone who is paid to prepare or assist in the preparation of any federal tax return, they must have that valid PTIN, or Preparer Tax Identification Number. And again, those paid preparers must sign and include their PTIN on the return filed with the IRS. So not signing a tax return that the preparer will then provide to you, that is a red flag that the paid preparer may be looking to make a fast buck off of you, potentially by promising a big refund or charging fees based on the size of the refund. And again, we will discuss later how to report these bad, unethical tax preparers to the IRS. So, moving on to some other things to consider with ghost preparers.

They file the tax return without getting your signature, without your knowledge or consent. They may on occasion require their fee to be paid in cash only, and then not provide you with a receipt for the fee that they've charged you. They may even, and we have seen this sometimes, the ghost preparers may alter your tax return documents after giving you a completed copy and not signing it. They could use the incorrect filing status to generate a larger refund based on certain tax credits that are only available to certain filing status. And then to get larger refunds, they may claim false dependents on your return. They might create or omit income. They might create false expenses, deductions, credits, again to generate a large refund. And worst of all, they may misdirect your refund into their bank account, not your bank account, and then disappear like a ghost. So, you never want to be victimized in any way by these ghost tax preparers. So, with that, let me turn it back over to my colleague Phil. PHILIP YAMALIS: Thanks, Richard. As you indicate, the word ghost does become a little scary, and we prepare your discussion on that. You know, let me remind you again to make sure that your preparer signs your tax return. They must also include their PTIN on the return that's actually filed with the Internal Revenue Service, whether they do so electronically or on paper. Remember that by law, paid preparers must sign all returns that they prepare for compensation and they must include their PTIN on the return that's actually filed to the Internal Revenue Service.

Under the law and IRS regulations, a paid preparer must sign the client's return and complete the information in the space provided for paid preparers. So in summary, your preparer must sign your tax return, they must complete all the information in the space provided for paid preparers on page two of the return, they must include the PTIN number on the return that's filed with the Internal Revenue Service, they must provide you with a copy of the return that is filed on your behalf by the preparer. Right? And finally, they must retain a copy of the return that they filed for you or a list showing your name and Social Security number for at least three years.

A return preparer can only use your information to prepare and file your tax return with the Internal Revenue Service. Let me note here that it is a crime for a tax return preparer to disclose to others any information provided by you for the preparation of your return. Now, moving on, and Richard and I can see a lot of the questions that are coming in already to our webinar today, and we know while the IRS knows that most tax return preparers are honest and trustworthy professionals who will provide an important service to their clients, we also know that there are some bad apples in the bunch who are dishonest and unethical. Now, the IRS is committed to investigating those preparers who act improperly. So today I'd like to share with you the taxpayers can report abusive tax preparers and suspected tax fraud to the Internal Revenue Service by using Form 14157, which is a Return Preparer Complaint. Again, if a taxpayer suspects that the tax preparer filed or changed their return without the taxpayer's consent or is possibly an abusive tax return preparer or an abusive tax preparation company, they should file Form 14157-A, which is the Tax Return Preparer Fraud or Misconduct Affidavit. Now, taxpayers can get these forms of course on anytime. You can complete the form online.

Simply print it, and then mail it to the IRS address that's shown on the instructions on the form. So, with that and trying to get that question answered under our belt, let me go ahead and turn it back over to Richard to discuss the third-party authorization feature. RICHARD FURLONG: Thank you, Philip. And thanks for that comment about most tax return preparers with whom we interact we consider to be reputable and ethical. It's those bad apples as you refer to Philip, are the ones we want to address. And I know some of the great tax professionals with whom we interact are attending today's webinar. So now I'm going to pivot a little bit and speak about the third-party authorization, specifically two reasons. First, you should know that there are two major reasons for granting a third party the authorization for the purpose of resolving or investigating your federal tax issue. The first reason that you might want to grant an authorization is for the purpose of allowing an individual to represent you in tax matters before the IRS. And this authorization is referred to as an IRS Power of Attorney, and as you can see on the slide, it's submitted using the Form 2848. Now, the second reason that you might want to allow not only an individual, but possibly a corporation, a firm with whom you're associated, an organization, or a partnership with which you're associated on your tax return, you can designate the third parties as your appointee but only to inspect and/or to receive confidential tax information from any office of the IRS. And this is done on that Form 8821, Tax Information Authorization that you see on the slide. Now, in most cases, these authorizations, the Form 2848 and the Form 8821, when properly completed and submitted to the IRS, they are then recorded on a special file. We refer to it as the Centralized Authorization File, or the CAF. And once recorded on the CAF, these authorizations then allows IRS assisters to verify your permission to speak with your representative or your appointee about your private tax related matters. Now, let me give you a little more information on the Power of Attorney, or the Form 2848. Again, a POA allows that third party to represent you before the IRS. So they can advocate on your behalf, they can negotiate on your behalf, and they can sign a closing agreement. Let's say on an audit matter on your behalf. They can argue, hopefully competently, the facts and the application of law to your specific tax issue. And also, the POAs, once 2848 is on the CAF, will normally receive copies of notices and transcripts of your account. But remember and going back to Philip's discussion of credentialed tax professionals, POAs include attorneys, Certified Public Accountants, Enrolled Agents, general partners of a partnership, full-time employees of a business, and family members and the POA must be in writing. Now, the Tax Information Authorization, or the Form 8821, again that allows your appointee to receive tax information for the specific tax matters and tax periods you specify. Let's say for example 2018, Form 1040.

Now the TIA, or the Tax Information Authorization, can be granted to anyone you choose. And that can be your family or friends, if you wanted them to assist you. It should be normally submitted in writing. However, if you are on the phone with the IRS and you want to give oral authority for the IRS to talk to the third party, that can be done in certain circumstances. And then finally on this slide I want to talk about the check box authority, or as it's officially called on the 1040, the Third-Party Designee. And this is very commonly used by taxpayers who are being serviced by reputable, ethical tax preparers. It's just above the signature line on page two of the 1040. And when you complete that designation, your third-party designee recognition to the third-party will be recorded on our computer systems when we receive and begin processing that tax return. So, no other action is required for the third-party designee status. And then the advantage is that the designee, perhaps your preparer, can exchange verbal information with the IRS on any return processing issues that might have been generated as a result of an IRS letter during the processing of that return, and they can also discuss any delays in the processing of a return for the refund being issued or any payments that might have been misapplied to that tax year's tax account, such as estimated payments. But again, and I mentioned this previously earlier, this third party designee authorization, it doesn't last forever. It expires one year from the due date of your tax return, and it only covers any issue arising with the tax return during the life of that authorization. And then finally as the note says on this slide, very important note, only the taxpayer is authorized to sign and cash any paper refund check being issued, not their return preparer. And so, with that, let me turn it back over to Philip. PHILIP YAMALIS: Thank you, Rich. That was a great summary of a long webinar on third-party authorizations, and you did that so concisely. Thank you for that.

So here it is, and again, I am watching the questions as they come in, and one person stated, actually a few people stated, I can't find that directory on What is the keyword? So, if you enter key words Choosing a Tax Pro in the search on, you will see that there is a wealth of information about choosing a tax preparer. Choosing a Tax Pro are the key words to search. So, the web page is dedicated to information on, of course, how to choose a tax professional. It includes what kind of tax preparer do I need for my particular situation?

There's information there that says how can I check a tax preparer's credentials? Remember the tax return preparer directory that we discussed earlier. And then there's another section there that says, what if I have a complaint about a tax preparer? That's all rehashed right here on this great website that I urge you to take a look at. This is a snapshot of choosing a tax professional website on Check out the short helpful YouTube IRS video that's on there that helps you. What an awesome short video that I strongly recommend to all of you.

Finally, let me share with you some resources. As you know, Rich and I have covered quite a bit of information today. So we want to ensure and make sure that you understand that the IRS has many, many resources on our website to help you find a tax preparer whom you can trust to provide ethical and competent tax services. So how do you find these resources in case you don't understand maybe something completely that we tried to explain to you? Here are some of the key words that you can use on Not only choose a paid tax preparer, I would urge you to use the key words ghost preparer, directory of federal tax return preparers, third party authorization. As Rich indicated earlier, report suspected tax fraud, and that's where you will find both of the forms that I alluded to just a little bit earlier. The Form 14157 and the 14157-A. So, all that can be found using the keyword searches that you see on this slide. So, Mr. McCarthy, my fine colleague out of Connecticut, I think that's all we have right now. So perhaps we should turn it over to you to take a look at some of the great questions that are coming in from our audience. What do you think? JOE MCCARTHY: I think that's a great idea, Phil. The again, I will be moderating the Q and A. Before we start, I want to thank you everyone for attending today's presentation. Choosing a Paid Tax Return Preparer and Avoiding Ghost Preparers. Earlier I mentioned that we want to know what questions you have for our presenters. Here is your opportunity. If you haven't input your questions, there's still time.

Go ahead and click on the dropdown arrow next to the ask question field. Type in your question and click send. Philip and Richard are staying on with us to answer your questions. One thing before we start, we may not have time to answer all the questions submitted, but we'll answer as many as time allows. Let's get started so we can get to as many questions as possible. So Richard, this is my first question, and it says, my tax return preparer e-filed my tax return, but I don't see her PTIN listed on the copy of the tax return that she gave me. Does this mean she's a ghost preparer? PHILIP YAMALIS: Joe, thank you for that question. I saw a couple of variations coming into the Q and A box. So the fact that you don't see the PTIN on the copy of the return that you were given does not necessarily mean that this preparer is a ghost preparer. So let me clarify here. While preparers are required to include their PTIN on the returns that are filed with the IRS, and that's whether it's electronically or on paper, Joe, they are not required to provide you a copy of their PTIN number. However, you do want to ask whether your preparer has an active PTIN, and they must renew it each tax season, and then inquire about any professional qualifications, such as the type that Philip discussed and I discussed with the Annual Filing Season Program. And if you suspect that your preparer is engaged in any improper tax preparation practices, then as Philip mentioned, please complete and submit to IRS that Form 14157. So I hope that helps, Joe. JOE MCCARTHY: Okay. Second question is for Phil. Can you explain again the requirements to become an enrolled agent? My preparer told me she's studying to take the exam, but I really don't know much about it.

PHILIP YAMALIS: So your preparer is studying to take the exam. They're working diligently. Great question, Joe. Again, the Enrolled Agent is licensed by the IRS. Right?

They're subject to the suitability check that I mentioned earlier. They have to pass a three-part special enrollment examination. Again it's a three-part exam. There's about a hundred questions on each part of the test. It costs about $182 for each part, and it's subject to you know scheduling an appointment to take it. Again, it's called a Special Enrollment Exam. It requires them to demonstrate efficiency in federal tax planning, individual and business tax return preparation, as well as representation before the IRS. Right. They have to continually complete 72 hours of continuing education every three years. You can learn more about the Enrolled Agent program for the persons that are asking that question in our frequently asked questions on Just type in Enrolled Agents, and you'll see those frequently asked questions. Awesome source of information. I hope that answers that question, Joe. JOE MCCARTHY: Thank you, Phil. The next question is for Rich. It's about Annual Filing Season Program. The question is, an AFSP, or annual filing season participant who completes the Annual Filing Season Program, are these types of preparers available for unlimited representation as well?

RICHARD FURLONG: Great question, Joe. Thank you. And the answer is no. So let me clarify again, because this is an important point, because there are literally hundreds and thousands of PTIN holders, and a relatively small percentage of them are those Annual Filing Season Program participants who each year take a certain number of CE credits to stay abreast of the ever-changing tax laws, and then they get that certificate of completion from the IRS. And it is something that many, many of them take great pride in advertising. Now, these individuals who have the Annual Filing Season Program credential, Joe, they can assist clients on an examination of the tax return they prepared even though they're non-credentialed. They're not normally CPAs, EAs, nor attorneys. But, and it's an important but, Annual Filing Season Program participants could not represent the client on any collection matters, for example, or any appeals protests with the IRS independent Office of Appeals. They're only limited to limited representation rights, and those would be, Joe, for the examination of any returns that they prepare. So I hope I clarified that, the distinction between AFSP and the credentialed preparers, CPAs, EAs, and attorneys. JOE MCCARTHY: Just to make sure that everybody's clear, the AFSP would also allow us to represent their clients in front of customer service representatives of the IRS? RICHARD FURLONG: Certainly on any notice, once they've been given that authorization via the 2848 or the 8821. So, any notices issued that would warrant going to IRS customer service, or on occasion to the taxpayer advocacy service. And yes, they can assist their clients if they have the ASPS credential. JOE MCCARTHY: Okay. The next one is for Phil. A friend of mine sent me an e-mail he got out of the blue. It was from somebody who charges less than anyone in our friend's neighborhood and always gets a refund. There is a link to upload. This e-mail has a link to upload my W-2s for the preparer to get back to me with an estimate of his fee and refund. Does this sound legitimate to you? So Rich, I know why our colleague is asking this question in regard that he does so much work with our data breach cadre at Stakeholder Liaison. PHILIP YAMALIS: I'm going to answer that question, Joe, with an emphatic no. When someone forwards you an e-mail that you receive out of the blue, first of all, that's something that's been etched in stone, it's from somebody who claims that they do taxes, that they charge less than anyone in the neighborhood, they always get a refund. It sounds too good to be true. The e-mail has a link I think you said to upload W-2s and other tax information.

That's always a no-no. We define this as phishing. Of which scammers, scammers often try to find victim's identities by using phony e-mails which claim to come from a trusted source, in this case the neighborhood tax preparer; right? Or a well-known financial institution or a government agency. It can even protray to come from the IRS and ask for detailed and personal financial information that is shown on a W-2. Folks, adamantly I say no very comfortable. It's known as phishing. The information requested is then used by scammers to gain access to victims bank accounts, open credit cards, get cash advances, possibly file a fraudulent tax return on behalf of you and collect the money. So, if you have any questions about phishing, the has an awesome presentation on phishing and identity theft and current schemes. You can forward a suspicious e-mail to the Internal Revenue Service mailbox, and that's Joe, Rich, do you want to add anything to that? RICHARD FURLONG: I think you did a great job of covering that. JOE MCCARTHY: So, the bottom line is don't do it? Don't do it.

RICHARD FURLONG: And right. Go back and check out and make sure it's a sincere e-mail and an accurate e-mail. JOE MCCARTHY: All right. My next question is for Rich. If a tax preparer does not charge, does not charge for preparing a return, does he need to sign the return or supply his PTIN? RICHARD FURLONG: Joe, I saw that question come in, and I smiled at it because it's interesting that as we know, you, Philip, and I, this is the time of year that many, many hundreds and thousands of reputable tax preparers are making their livelihood in preparing returns. But on occasion there are competent, ethical paid preparers who prepare a tax return pro bono. Could be a family member, friend. Could be a very simple return and they don't feel obligated to charge a fee. And in that case the Preparer Tax Identification number for a tax return prepared I'll call it pro bono, Joe, does not need to be included in the return sent to the IRS. But remember, some of the fly-by-night preparers, including the ghost preparers, will take cash payments and then not provide a receipt, and they are being compensated they are in that instance, if they're compensated in any way, Joe, they are required to include that PTIN on the return filed with the IRS. JOE MCCARTHY: Okay. Next up is a question for Phil, and here's the question, Phil. My preparer e-mailed me to tell me I may get some government stimulus money on my 2020 taxes. I received a couple of stimulus payments in my bank account. One last summer and another small direct deposit last month. Do you think I'm eligible for anymore government stimulus on my 2020 tax return? Also, second part of the question, are these taxable on my 2020 return? I assume they're referring to the stimulus payments. Are the stimulus payments taxable on my 2020 return? What a loaded question? So, thank you for that question.

We'll try to touch on it. So, the stimulus payments are also known as the economic impact payments. The first and the second economic impact payments. Let's answer the last part of that question first. Is that taxable on my tax return? No. It's not taxable. In fact, if you got it, it's an advance payment of something that we're calling the economic recovery credit that you'll see on line 30 of the 1040 tax form this year. The economic recovery credit, as you can see, is what you take as a credit on your return. If you do not receive those first two stimulus payments that are referred to. And again, you take that credit if you meet the eligibility requirements. Those eligibility requirements can, of course, be found on

As opposed to will I have an opportunity to take more payments on that 2020 return? Watch the news. The bottom line is in the beginning of April of to 2020, right, the IRS and the treasury began delivering the first round the payments within two weeks of the legislation being passed, more than 160 million economic impact payments to taxpayers across the country. I think the number that it totaled was over $270 billion. They of course managed the extended filing season. With the COVID act of 2020, then we delivered another 47 million payments in the second round. And that second round totaled over 132 billion. Those second round of payments was issued by January 15 of 2021. There's a tool on called the Get my Payment tool which allows you to see the final payments that were paid out to you. Those were updated for the first or second impact payments by now. So those people who were eligible for the credit, they've already received it in advance by seeing a Form 1444, 1444-B, to see whether it was made by direct deposit, will be able to share that information with their tax preparer. So most people that got it in advance will not qualify for the credit. But if the individuals didn't receive a payment, they didn't receive the full amount, they might be eligible to claim this recovery rebate credit that I spoke about on their 2020 tax return. Again, eligibility for the amount of the credit are based on 2020 tax year information, even though when we sent out those payments we based it on 2019 or 2018 returns. So someone that might have been a dependent on an 2018 return that didn't get it but is not a dependent on a 2020, this is just one example, return may be eligible to get that credit. So that's a quick synopsis. For more information, I refer you to Type in economic recovery credit or economic impact payment to get more information to answer that question. Or I can be here an hour, and nobody wants that. JOE MCCARTHY: I'm sure that people would love to hang on the phone to listen to you. Alright, let me toss the next question over to Richard. I am anxious to get my taxes filed as soon as possible.

I always get a refund. I'm a single parent with two kids, and I really need the money this year, but I haven't received both of my W-2s. I had two jobs last year. Should I file with my last pay stub? RICHARD FURLONG: Joe, thanks for that question, and again, I saw a couple of variations on that coming in and the answer is no, we don't recommend that one ever file a tax return using your last pay stub. But we do see on occasion that the W-2 wage and income statement does not catch up with the taxpayer, maybe because the business disappeared or there was a problem with the mail. It might be provided electronically. So we also first recommend going back to your employer, if that employer is still in existence, getting a copy of the W-2 wherever possible before filing your tax return. Because as you, Joe, know, and you, Philip, know, those W-2s, when they are filed with the Social Security administration, that data is coming to the IRS during tax season, and we are doing a fair amount of matching, considerable amount of matching against the tax returns. Now, when I started with the IRS, it was in customer service, and each year when I was on the telephones in February and into March, we would get some calls from taxpayers who despite their best efforts never got their W-2. So we have a Form 4852, and you can download it from our website, Form 4852, and enter information that you can then file that form with your tax return. Or wherever possible, Joe, we encourage folks to get those W-2s. It makes life much easier when we are processing that tax return. So I hope that helped. JOE MCCARTHY: Okay. One last question, and Phil, I hope you answer this one nice and quick, because we're running out of time. Do I have to find an Enrolled Agent, CPA, or an attorney to do my taxes? PHILIP YAMALIS: Excellent question. And like Rich, we did see various variations. My producer is laughing at me, because they know that nothing we say is quick. But we'll try, Joe. Again, variations of this question did come in, and the answer to that is no. Anyone, again anyone that has a valid preparer tax ID number can assist you with filing a tax return. However, you need to make sure that you're selecting a competent tax professional for your specific needs. Okay. Some tax professionals specialize in certain things. You can use the IRS directory of federal tax return preparers to find a tax return preparer that you prefer based on credentials and/or qualifications, the directory again, like I said earlier, doesn't list all tax return preparers with PTINs. It only pertains to one that have a PTIN, number two, currently have a professional or a program record of completion with the IRS. So, I hope that answered the question briefly. Simply and quickly. JOE MCCARTHY: Alright. Well, that's all the time we have for questions. I want to thank Philip and Richard for sharing their knowledge and expertise and for answering your questions. Now, before we close the Q and A session, Richard, what key points do you want the attendees to remember from today's webinar? RICHARD FURLONG: Joe, that hour moved by very quickly and we covered a lot of information. We discussed the various types of paid preparers, credentialed and uncredentialed, we emphasized periodically the importance of avoiding those ghost preparers and making sure that your compensated tax preparer signs your tax return. Phil did a nice overview of the Directory of Federal Tax Return Preparers and the information on for Choosing a Tax Preparer. And then we also covered that Form 14157, if you ever have occasion to interact with an unscrupulous tax preparer who might be involved in professional misconduct. So Joe, with that, let me turn it back to you to close out today's webinar. JOE MCCARTHY: Well, thanks, Richard.

Audience, we are planning additional webinars throughout the year. To register for all upcoming webinars, please visit keyword search Webinars, and select Webinars for Practitioners or Webinars for Small Businesses. When appropriate, we will be offering CE or continuing education credit for upcoming webinars. We invite you to visit our video portal. There you can view archived versions of our webinars. Again, a big thank you to our speakers, Philip and Richard, for a great webinar, for sharing their expertise and for staying on to answer your questions. I also want to thank you, our attendees, for attending today's webinar, Choosing a Paid Tax Return Preparer and Avoiding Ghost Preparers. Before we close out the session, we would like to hear from you. We'd like to take a minute to answer the following question. Did you know about the directory of federal tax return preparers on before this webinar? And have you ever used the directory? Enter your response in the Q and A question field. Thank you for your questions. We would appreciate it if you would take a few minutes to complete a short evaluation before you exit. If you'd like to have more sessions like this one, let us know. If you have thoughts on how we can make them better, please let us know that as well.

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Thanks again.