HOUSTON – American taxpayers should protect themselves from becoming victims of tax fraud, lured in by promises of larger tax refunds, according to IRS Criminal Investigation’s Houston Field Office.
“It is often someone with ties to the community, maybe a friend of a friend. Word of mouth is how many of them work,” said Rodrick Benton, the acting special agent in charge of the field office. “They get you by saying they can get you more money, and then you get caught in their crimes, and even become one of their victims.”
Tax crimes like those committed by return preparers and taxpayers remain a priority for prosecution by United States Attorneys, to both bring the criminals to justice and to protect the American people by deterring future crimes.
“Every Texan who hires a tax preparer this season deserves honesty and integrity—not a scheme or deceit,” said U.S. Attorney Nicholas J. Ganjei of the Southern District of Texas. “Working closely with IRS-CI, my office will identify, prosecute, and imprison anyone who profits by corrupting a system that honest, hardworking Americans rely upon. If you are filing fraudulent returns, inflating deductions, or stealing refunds, understand this—the Southern District of Texas is watching, and we are coming for you.”
“Delivering justice to those who illegally take advantage of our tax system is integral to the wellbeing of our nation and every American citizen,” said U.S. Attorney Justin R. Simmons of the Western District of Texas,. “In the Western District of Texas alone, these crimes cost taxpayers, private businesses and government entities millions of dollars each year. Together with IRS-CI, we aim to ensure that those who cheat our system, and cheat the American taxpayer, face severe consequences. In so doing, we play our part in ensuring the American people have a country where they can live their lives, enjoy liberty, and pursue happiness.”
Criminal return preparers often victimize taxpayers by gaining access to social security numbers and other personal information. They can use that identifying information to commit other crimes or sell the information to other criminals. Other return preparers take a much more straightforward approach by simply directing a client’s tax return to be deposited into the preparers bank account rather than the client’s account.
Then there are “ghost preparers”, individuals who illegally prepare tax returns for a fee but refuse to sign the return or provide the required IRS Preparer Tax Identification Number (PTIN), making it appear as though the taxpayer prepared the return themselves. Ghost preparers often hide their identity to commit tax fraud, such as fabricating income, claiming false credits or deductions, or inflating refunds, which leaves their clients responsible for the consequences.
Filing a false or fraudulent tax return, or assisting someone in doing so, can lead to both civil and criminal penalties, including fines, and imprisonment. In cases of fraud, the IRS may assess tax or begin collection proceedings at any time under Internal Revenue Code §6501(c)(1), meaning civil consequences can arise years later. IRS‑CI maintains a conviction rate of approximately 90%, reflecting the strength of its investigations and case construction.
Warning Signs of Ghost or Fraudulent Preparers
Taxpayers should be cautious of preparers who:
- Refuse to sign the return or provide a Preparer Tax Identification Number.
- Promise inflated refunds or base fees on a percentage of the refund.
- Ask you to sign a blank return or refuse to let you review your complete return before filing.
- Direct your refund to their bank account or a third party, rather than yours.
- Push false credits, deductions, or business expenses without proper documentation.
Safe Filing Practices to Protect Your Refund & Identity
- Choose a reputable preparer with clear credentials by starting at the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.
- Determine what type of tax help you need.
- Always review your return line‑by‑line and ensure your refund is deposited to your own account.
- Only sign the return when it is fully completed, keep copies of all documents and never sign a blank return.
- Safeguard your identity and enroll in the IRS Identity Protection PIN program.
- Report suspected misconduct to authorities and the IRS; retain evidence such as receipts, emails, and bank records. Start here.
IRS-CI is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. It is the only federal law enforcement agency with investigative jurisdiction over violations of the Internal Revenue Code. IRS-CI’s Houston Field Office spans from Houston to El Paso, with offices along the Gulf Coast, Central and West Texas.
