Beware of Ghost Tax Preparers: Red Flags and the Murrin v. Commissioner Ruling

Worried about tax mistakes coming back to haunt you? Learn how the IRS can reopen old returns due to preparer errors and why you’re responsible.

For years, taxpayers thought they were safe after three years if the IRS didn’t contact them. That statute of limitations was like the finish line.

But things changed in 2025.

A court case, some common scams, and the rise of ghost preparers mean a mistake could leave you open to an audit years later.

1. What’s a Ghost Preparer?

If someone gets paid to do your taxes, they need a Preparer Tax Identification Number (PTIN). Real pros sign the return and include their PTIN.

A Ghost Preparer is a scammer who does your return but won’t sign it. They’ll tell you to sign and mail it, or they skip the signature part if filing online, so it looks like you did it yourself.

Red Flags for Ghost Tax Preparers

Watch out for these signs before giving anyone your Social Security number:

• Won’t sign: They say they just provide the software or are helping as a friend but still charge you.
• Cash only: They don’t want a paper trail and won’t give you a receipt.
• Fees based on refund: They charge a percentage of your refund instead of a set fee (the IRS considers this a red flag).
• Refunds to their account: They want your refund sent to their account to be split later.
• Fake deductions: They say you’re guaranteed a high refund or claim credits you’ve never heard of.

2. Murrin v. Commissioner: How Things Changed in 2025

To see why ghost preparers are risky, look at the Stephanie Murrin case. It’s a warning for taxpayers.

Murrin v. Commissioner: The Story

Stephanie Murrin hired Duane Howell to do her taxes in the 90s. He used fraud to inflate her refunds, but she didn’t know. Over 20 years later, the IRS found the fraud and sent her a bill for over $300,000 in back taxes, penalties, and interest.

Murrin said that because she was innocent and the three-year limit was up, the IRS couldn’t come after her. But the court disagreed. It said that if a return is fraudulent, the IRS can assess the tax at any time. This means if your preparer commits fraud, even if you don’t know about it, the clock never stops.

3. Audits That Last Forever: IRS and Fraud

Most people know about the 3-year audit window. Some know about the 6-year window for big mistakes (missing 25% or more of income). But the Fraud Exception is different.

Can the IRS audit me after 10 years?

Now, the answer is yes.

The IRS usually audits within 2 to 3 years, but if there’s fraud, there’s no time limit.

If a ghost preparer puts a fake loss on your 2025 return, the IRS could come after that money in 2045. Because interest builds up daily, a $5,000 mistake could become a $50,000 debt by retirement.

4. Tax Preparer Fraud: You’re Responsible

Many think the preparer is responsible if they did the math. But you’re responsible when tax preparer commits fraud.

Even if the IRS goes after the preparer, they’ll still collect the money, interest, and penalties from you.

5. The Dirty Dozen Scams of 2025

Each year, the IRS lists common tax scams called the Dirty Dozen. The 2025 list includes scams using digital tricks and social media lies.

Common Scams

• Fuel Tax Credit: Preparers tell people who aren’t farmers they can claim a credit for farm equipment.
• Social Media Wealth Hacks: People on TikTok and Instagram tell others to file fake W-2s or claim made-up self-employment credits.
• Offer in Compromise (OIC) Mills: Companies charge a lot to settle your debt for pennies, even if you don’t qualify.
• Spear Phishing: Scammers pretend to be the IRS to steal your tax software logins.

1. How to Protect Yourself: A Checklist

Don’t end up like Stephanie Murrin. If you’re hiring a tax preparer, do these things:

• Check the Signature: Don’t sign a return without the preparer’s signature and PTIN.
• Read Every Line: You’re responsible for everything on the return. If you see something wrong, ask for a correction.
• Use the Directory: Check the IRS Directory of Federal Tax Return Preparers to be sure your pro is qualified.
• Get a Copy: Always get a signed copy of your return.
• Report Fraud: If you think you’ve been scammed by a ghost preparer, use IRS Form 14157-A.

In short

The Murrin case made it clear: the IRS sees fraud as making the return poisoned from the start. It doesn’t matter who did it.

Choosing a tax preparer means choosing who you’re tied to for the next 30 years. Avoid ghosts, check every deduction, and remember that if a refund sounds too good, it’s likely a trap.

Disclaimer: while we aim to spark your interest and keep things entertaining, please treat everything shared here as food for thought rather than a rulebook for life. Since we don’t have a crystal ball and your situation is as unique as a fingerprint, we cannot guarantee accuracy or specific results, nor should you rely on this as professional advice. Please take these insights with a grain of salt, do your own homework, and always consult a qualified expert before making any big moves—because what works for one person might not work for all!