Scam spotted thanks to a clever store clerk

January 18, 2018  by Monica Vaca
Associate Director, Consumer Response and Operations, FTC

You’re going about your normal day at work when, suddenly, there’s a call that looks like it’s from your electric company. That’s what the caller ID shows, and what the person on the line says. The voice on the line tells you that, because of late payments, the power to your business is about to be cut off. Without power, you can’t keep your business running, so that’s an emergency. Or is it?

The next line of the story tells you that this not an emergency at all. Instead, it’s a straight-up scam. Because the caller next tells you to go to the store right away and buy a cash reload card. And the caller wants the card’s PIN code – which, of course, means the money is gone right away. But no legitimate business – and certainly no legitimate power company – will ever demand that you pay with cash reload cards like MoneyPak, Reloadit or Vanilla Reload. Or insist that you pay with a gift card or by wiring money.

Luckily, several people who’ve reported this scam to the FTC figured out it was a scam before they sent the money. At least one uncovered it thanks to a store clerk who spotted the scam for what it was and stopped the transaction in its tracks. But give everybody you know these reminders, whether you’re at home or at work:

Caller ID can be faked, so the person on the phone is not always who caller ID says it is.
Never wire money, put money on a cash reload card or gift card and give the PIN code to anyone who asks you to. The person who insists on one of those forms of payment is scamming you, so tell the FTC about them.
If someone threatens to cut off your power, get off the phone, look up the real power company number, and check with them before you do anything.

And, maybe, the next time you see an attentive clerk at the store, thank them for having your back.

IRS: Don’t be victim to a ‘ghost’ tax return preparer

WASHINGTON – Today, towards the end of the second full week of the 2019 tax filing season, the Internal Revenue Service warned taxpayers to avoid unethical tax return preparers, known as ghost preparers.

By law, anyone who is paid to prepare or assist in preparing federal tax returns must have a valid 2019 Preparer Tax Identification Number, or PTIN. Paid preparers must sign the return and include their PTIN.

But ‘ghost’ preparers do not sign the return. Instead, they print the return and tell the taxpayer to sign and mail it to the IRS. Or, for e-filed returns, they prepare but refuse to digitally sign it as the paid preparer.  

According to the IRS, similar to other tax preparation schemes, dishonest and unscrupulous ghost tax return preparers look to make a fast buck by promising a big refund or charging fees based on a percentage of the refund. These scammers hurt honest taxpayers who are simply trying to do the right thing and file a legitimate tax return.

Ghost tax return preparers may also:

Require payment in cash only and not provide a receipt.
Invent income to erroneously qualify their clients for tax credits or claim fake deductions to boost their refunds.
Direct refunds into their own bank account rather than the taxpayer’s account.

The IRS urges taxpayers to review their tax return carefully before signing and ask questions if something is not clear. And for any direct deposit refund, taxpayers should make sure both the routing and bank account number on the completed tax return are correct.

The IRS offers tips to help taxpayers choose a tax return preparer wisely. The Choosing a Tax Professional page has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.

Taxpayers can report abusive tax preparers to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.


Here are ten tips from the IRS for taxpayers to remember when selecting a preparer:

Check the Preparer’s Qualifications. People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.


Check the Preparer’s History. Taxpayers can ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, people can check with the State Board of Accountancy. For attorneys, they can check with the State Bar Association. For Enrolled Agents, taxpayers can go to the verify enrolled agent status page on IRS.gov or check the directory. 


Ask about Service Fees. People should avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.


Ask to E-File. Taxpayers should make sure their preparer offers IRS e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit.


Make Sure the Preparer is Available. Taxpayers may want to contact their preparer after this year’s April 15 due date. People should avoid fly-by-night preparers.


Provide Records and Receipts. Good preparers will ask to see a taxpayer’s records and receipts. They’ll ask questions to figure things like the total income, tax deductions and credits.


Never Sign a Blank Return. Taxpayers should not use a tax preparer who asks them to sign a blank tax form.


Review Before Signing. Before signing a tax return, the taxpayer should review it. They should ask questions if something is not clear. Taxpayers should feel comfortable with the accuracy of their return before they sign it. They should also make sure that their refund goes directly to them – not to the preparer’s bank account. The taxpayer should review the routing and bank account number on the completed return. The preparer should give you a copy of the completed tax return.


Ensure the Preparer Signs and Includes Their PTIN. All paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN.


Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients. However, some preparers are dishonest. People can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their return without the taxpayer’s consent, they should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.