Wang Solutions

Enrolled Agent’s PTIN Stolen by Tax “Professional”

Taxpayers are not the only victims of identity theft in the tax world. Apparently, now tax professionals have had their PTINs stolen by other tax professionals – or rather, un-professionals. This recently happened to a new kid on the tax block, an Enrolled Agent who had never signed a taxpayer’s return before. Imagine this EA’s surprise when an IRS penalty notice for failing to include an EITC worksheet on a filed return showed up at the door.

Imagine the EA’s even greater surprise when they logged into their PTIN account online and found out that more than 100 tax returns had been filed using their professional info. This wasn’t just a bad case of job hazing. It seems that a fraudulent preparer wanted to cash in on preparing tax returns – without going through the hassle of continuing education or dealing with potential preparer penalties.

It’s cases like these that make you stop and say, What the heck were they thinking? Surely the fake preparer knew they would get caught? Well, it’s not quite that simple. Although the IRS Return Preparer Office advises tax professionals with compromised PTINs to file Form 14157, Complaint: Tax Return Preparer, the tricky part is filing that form without it seeming like an honest preparer is complaining about his or her self. The risk is that the IRS might open a complaint file against the preparer who didn’t do anything wrong.

The RPO also advises preparers to periodically login to their PTIN accounts to make sure all of their information is A-OK. While this is good advice, the problem is that if something actually is wrong, there doesn’t seem to be an IRS procedure for replacing a compromised PTIN. It’s pretty much like shutting the stable door after the horse has bolted. Furthermore, there’s also no IRS procedure for removing the penalty for failing to include the EITC worksheet, even though the real EA didn’t even file the return.

As with the IRS’s sluggish troubleshooting for taxpayers who are victims of identity theft, it seems the agency’s solutions for tax preparers with stolen PTINS aren’t fully fledged either. As such, both new and veteran tax professionals will have to take matters into their own hands for now and diligently safeguard their PTIN information.