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Taxpayers should beware of ghost preparers

IRS Tax Tip 2021-20, February 17, 2021

As people begin to file their 2020 tax returns, taxpayers are reminded to avoid unethical ghost tax return preparers.

A ghost preparer is someone who doesn’t sign tax returns they prepare. Unscrupulous ghost preparers often print the return and have the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost will prepare but refuse to digitally sign as the paid preparer.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number (PTIN). Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a quick profit by promising a big refund or charging fees based on the size of the refund.

Ghost tax return preparers may also:

  • Require payment in cash only and not provide a receipt.
  • Invent income to qualify their clients for tax credits.
  • Claim fake deductions to boost the size of the refund.
  • Direct refunds into their bank account, not the taxpayer’s account.

It’s important for taxpayers to choose their tax return preparer wisely. The Choosing a Tax Professional page on 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.

No matter who prepares their return, taxpayers should review it carefully and ask questions about anything that’s not clear before signing. They should verify their routing and bank account number on the completed tax return for any direct deposit refund. Taxpayers should watch out for ghost preparers putting their bank account information on the returns.

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

Source: IRS Tax Tips

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What is a Voucher?

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A voucher is an internal document describing and authorizing the payment of a liability to a supplier. It is most commonly used in a manual payment system. A voucher typically contains the following information:

  • The identification number of the supplier
  • The amount to be paid
  • The date on which payment should be made
  • The accounts to be charged to record the liability
  • Any applicable early payment discount terms
  • An approval signature or stamp
  • Voucher information may be assembled into a packet, where the basic voucher document is attached to the supplier invoice, evidence of receipt, and purchase order. This packet is useful for keeping related documents in one place, and makes it easier to both justify and audit payables transactions.

A voucher is created following the receipt of an invoice from a supplier. It is stamped “paid” when a check or electronic payment is made to a supplier, and is then archived, along with any supporting documents.

Vouchers are useful for maintaining a higher level of control over the payables process.

If vouchers are used for all payables, their totals can be aggregated to determine the total amount of accounts payable outstanding. This function is not needed in a computerized system, where the aged payables report is used instead.

A voucher is not created when a liability has only been accrued (which is in the absence of a supplier invoice). Also, vouchers are not used in the payroll process.

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Get Your Refund Faster: Tell IRS to Direct Deposit your Refund

The best and fastest way to get your tax refund is to have it electronically deposited for free into your financial account. The IRS program is called direct deposit. You can use it to deposit your refund into one, two or even three accounts.

Eight out of 10 taxpayers get their refunds by using Direct Deposit. It is simple, safe and secure. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.

Combining direct deposit with IRS e-File is the fastest way to receive your refund. IRS issues more than 9 out of 10 refunds in less than 21 days. You can track your refund using our Where’s My Refund? tool.

Direct deposit is easy to use. Just select it as your refund method through your tax software and type in the account number and routing number. Or, tell your tax preparer you want direct deposit. You can even use direct deposit if you are one of the few people still filing by paper. Be sure to double check your entry to avoid errors.

Direct deposit also saves you money. It costs the nation’s taxpayers more than $1 for every paper refund check issued, but only a dime for each direct deposit made.

The federal tax refund is often the largest single check many people receive. It’s an opportune time to start or add to your savings. You can divide your refund into two or three additional financial accounts, including your Individual Retirement Account, or purchase up to $5,000 in U.S. Series I Savings Bonds.

Splitting your refund is easy. You can use your tax software to do it electronically. Or, use IRS’ Form 8888, Allocation of Refund (including Savings Bond Purchases) if you file a paper return. Just follow the instructions on the form. If you want IRS to deposit your refund into just one account, use the direct deposit line on your tax form.

With split refunds, you have a convenient option for managing your money — sending some of your refund to an account for immediate use and some for future savings — teamed with the speed and safety of direct deposit.

Your refund should only be deposited directly into accounts that are in your own name; your spouse’s name or both if it’s a joint account. No more than three electronic refunds can be deposited into a single financial account or pre-paid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund.

Whether you file electronically or on paper, direct deposit gives you access to your refund faster than a paper check.

Direct deposit also avoids the possibility that your check could be lost or stolen or returned to IRS as undeliverable.

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Income Tax Extensions Explained

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Nearly everyone knows that April 15 is the deadline for submitting tax returns in the United States. Although some entities may need to file before that date – including businesses, which must generally file by March 15 – most individuals need to be concerned with the April deadline.

Tax returns and payments submitted after the due date will be subject to both penalties and interest on the amount owed. However, if you file for a tax extension, you will be given a longer period of time to file your tax

How Do You File for a Tax Extension?

All taxpayers have the option to file a tax extension – whether they are individuals or businesses. To get a tax extension for your personal tax return, you must file IRS Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return). To get a tax extension for your business tax return, you must file IRS Form 7004 (Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns).

The IRS allows you to request a tax extension either electronically or through the mail. Just like a tax return, a tax extension form must be postmarked on or before the April 15 deadline in order to be considered “on time.” If you e-file a tax extension, it must be submitted by midnight in your local time zone.

TIP: If you e-file a tax extension with an Authorized IRS e-file Provider, like or, you will receive a confirmation email as soon as the IRS approves your request. But if you file by paper mail, you will only be notified if your tax extension is denied.

If you are an individual taxpayer, there are 3 main rules that you must follow to get a tax extension with Form 4868:

• Properly estimate your tax liability using the information available to you
• Provide your total tax liability on Form 4868 (Line 4)
• File Form 4868 by the regular due date of your return (April 15 for most people)

Note that there are some exceptions for certain taxpayers who are out of the country and those serving overseas in the U.S. military, as well as persons affected by natural disasters.

Once you get a tax extension, you have until the extended deadline to file your tax return. For most individuals, the extended deadline is October 15 (of that same year). The IRS rarely grants extensions beyond 6 months, so make sure you can file by mid-October.

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