IRS to boost ghost preparer oversight after GAO report

The Government Accountability Office reported that ghost preparers - paid tax preparers who omit identifying information on returns - remain difficult for the Internal Revenue Service to detect, leaving taxpayers liable for errors, fraud or stolen refunds. GAO noted that paid preparers handled more than half of all tax returns in fiscal year 2025 and that the IRS's current efforts are fragmented across six offices.

GAO issued three recommendations: (1) the Commissioner of Internal Revenue should review the quality and usefulness of existing data and identify opportunities to enhance data collection, sharing and analysis for ghost preparer cases; (2) the Commissioner should incorporate ghost preparer identification and enforcement into a comprehensive, coordinated paid preparer strategy and allocate needed resources; and (3) the Commissioner should define and document measurable strategic objectives and performance goals for ghost preparer initiatives, including methods to assess taxpayer outreach effectiveness.

The IRS indicated agreement with all three recommendations and outlined steps it has begun or plans to begin, including a data-quality review, development of a unified preparer strategy and the establishment of performance metrics. The agency has not yet provided a timeline for completing these actions.

If implemented, the measures would give the IRS a clearer picture of ghost preparer activity, enable more targeted enforcement and reduce the risk that taxpayers bear the cost of fraudulent or erroneous returns prepared by unidentified individuals.