This is my first year filing taxes, and I hired an accountant to do it. Instead of listing his firm, he marked me as self-filing. Should I be worried about this?
Yes, it’s a red flag. How much of a refund is your tax return showing?
Cleo said:
Yes, it’s a red flag. How much of a refund is your tax return showing?
I’m getting $250 back because I made a quarterly payment and didn’t technically make any money this year.
Laken said:
@Harper
When you say you ‘didn’t technically make money,’ what does that mean exactly?
My expenses were higher than my revenue.
Laken said:
@Harper
When you say you ‘didn’t technically make money,’ what does that mean exactly?
My expenses were higher than my revenue.
What kind of expenses were included? Do they match your records? Also, how have you been getting by if you didn’t make any money this year?
@Laken
I’ve been living off a 401k distribution that I already paid taxes on. The expenses listed were legitimate, like equipment and supplies.
Harper said:
@Laken
I’ve been living off a 401k distribution that I already paid taxes on. The expenses listed were legitimate, like equipment and supplies.
Got it. Just make sure all the listed expenses on your return match your actual records. As for the 401k, when did you take the distribution?
Harper said:
@Laken
I’ve been living off a 401k distribution that I already paid taxes on. The expenses listed were legitimate, like equipment and supplies.
What business expenses were listed alongside your 401k income?
@Peyton
The business income didn’t cover the expenses. Some of the big ones were a truck (mileage was used instead of writing it off), storage equipment, and tools for wildlife removal.
Harper said:
@Peyton
The business income didn’t cover the expenses. Some of the big ones were a truck (mileage was used instead of writing it off), storage equipment, and tools for wildlife removal.
If your preparer didn’t sign the return, you’ll need to check all expenses carefully and ensure everything is well-documented.
Laken said:
@Harper
When you say you ‘didn’t technically make money,’ what does that mean exactly?
My expenses were higher than my revenue.
Do you also have W-2 income? This might not be major fraud, but the fact that they didn’t sign is still concerning.
Ghost preparers (those who don’t sign tax returns they prepare) are a big red flag for fraud.
Sometimes it’s as simple as them using software like FreeTaxUSA and skipping the paid preparer section. But it’s illegal either way. Worst-case scenario, they file fraudulent returns to claim bigger refunds or deductions and keep themselves out of trouble by not signing the return.
@Dane
Exactly. Whether they’re cutting corners or doing something shady, it’s a good reason to avoid them.
Harper said:
Here’s what they said when I asked for their firm’s EIN: Imgur: The magic of the Internet
That response raises so many red flags. E-filing has nothing to do with whether the preparer signs the return. If they prepared your taxes, they’re required to sign. This isn’t about protecting you—it’s about them avoiding responsibility if something goes wrong.
Harper said:
Here’s what they said when I asked for their firm’s EIN: Imgur: The magic of the Internet
His explanation is nonsense. Preparers who get paid to do taxes must sign the return. The law is very clear on this.
It’s definitely a red flag. Tax preparers must include their name, PTIN, and signature on returns they prepare for payment. Anyone who skips this step isn’t someone you should trust with your personal information.