3-18-2025 4:24am

Look Out For

Maryland Taxpayers Beware: Protect Yourself from Scam Tax Preparer

As tax season is in full swing, Maryland residents are urged to stay vigilant against fraudulent tax preparers who engage in unethical and illegal practices that could cost taxpayers thousands of dollars. The Maryland Society of Accounting & Tax Professionals (MSATP), in partnership with the CASH Campaign of Maryland and MVLS, with guidance from the Board of Individual Tax Preparers, is raising awareness of common tax scams and educating taxpayers on how to verify they are working with a licensed professional.

Common Tax Scams to Watch For

Fraudulent tax preparers use a variety of deceptive tactics to manipulate tax returns. Some of the most common scams include:

Fake W-2 Income Statements – Some dishonest preparers generate falsified W-2 forms that show more tax withholding than actually occurred, inflating the taxpayer’s refund.
Phony or Inflated Deductions & Credits – Scammers often add fake medical expenses, mortgage deductions, or charitable contributions to reduce taxable income. Some even inflate business expenses on Schedule C or Schedule F for small business owners and farmers.
Earned Income Credit (EIC) Fraud – Some tax preparers underreport income or invent dependents to falsely qualify taxpayers for a larger Earned Income Credit refund. Taxpayers can only claim dependents they supported themselves. 'Trading' dependents is still fraudulent. – Some tax preparers underreport income or invent dependents to falsely qualify taxpayers for a larger Earned Income Credit refund.

Taxpayers who unknowingly submit fraudulent returns can face serious consequences, including back taxes, penalties, and interest.

How to Protect Yourself from Tax Fraud

Anyone can fall victim to a tax scam, but fraudulent preparers often target minority and lower-income communities, as well as those where English is not the primary language. ESL taxpayers should consider having a translator, who is not associated with the preparer, help them review the return whenever possible. However, fraudulent preparers often target minority and lower-income communities, as well as those where English is not the primary language. To protect yourself:

Review Your Tax Return Carefully – If your tax refund seems too good to be true, it probably is. Verify all information before filing.
Verify Your Tax Preparer’s Credentials – Every tax preparer should have a Preparer Tax Identification Number (PTIN) that begins with a "P", followed by eight digits (P12345678), and hold credentials as an attorney (J.D. or Esq.), Certified Public Accountant (CPA), enrolled agent (EA), Maryland Registered Preparer (MRP), or IRS annual filing season participant (AFSP).
Use Official Resources to Confirm Their Legitimacy –
- The Maryland State Board of Individual Tax Preparers provides a Registration Search to verify Maryland registered preparers.
- The IRS Directory of Federal Tax Return Preparers lists credentialed professionals nationwide.
- The Maryland Comptroller's Office maintains a list of blocked tax preparers, which can be found here: Comptroller’s Blocked Tax Preparers.
- The Maryland State Board of Individual Tax Preparers provides a Registration Search to verify Maryland registered preparers.
- The IRS Directory of Federal Tax Return Preparers lists credentialed professionals nationwide.
Ensure Your Preparer Signs Your Return – The preparer's name, PTIN, address, and phone number should all appear on the second page of Form 1040. They should also sign the return.
Obtain Copies of Your Returns – A reputable preparer will always provide copies of your federal and state tax returns.
Know How Your Refund Will Be Processed – Refunds should never be issued through the tax preparer’s personal bank account. Taxpayers should receive refunds directly from the IRS or state government via check, direct deposit, or a prepaid debit card.

Report Suspected Tax Fraud

If you suspect a tax scam or believe you have been a victim of tax fraud, report it immediately:

Maryland Board of Individual Tax Preparers
Phone: 410-230-6257
Email: DLOPLTaxPrep-LABOR@maryland.gov

Office of the Comptroller of Maryland
Phone: 410-767-1322
Email: cdcprograms@marylandtaxes.gov

Internal Revenue Service (IRS)
For information about reporting fraud to the IRS, visit: IRS Tax Scams Reporting

About MSATP

The Maryland Society of Accounting & Tax Professionals (MSATP) has been serving the accounting and tax community for over 65 years. MSATP provides education, advocacy, and networking opportunities for tax professionals, ensuring that Maryland taxpayers receive high-quality services from ethical and knowledgeable professionals.