Tax Preparer Scams in Michigan: Red Flags and How to Check

Most tax preparers are honest. But "tax preparer" is not a credential anyone issues. The Michigan Board of Accountancy licenses CPAs and accounting firms, not preparers, and the federal PTIN requires no exam. Opening a storefront in February and closing it in April costs almost nothing, and the schemes that follow repeat every year. Michigan does give you one advantage: every real CPA here has a license number, and its first four digits tell you what the person is allowed to do.

The ghost preparer

This is the scheme the IRS warns about every filing season (opens in new tab). A ghost preparer takes your documents, prepares the return, collects a fee, and leaves the paid-preparer section blank so the return looks like you did it yourself. Often they ask you to sign a blank or unfinished form, or they file electronically without showing you the final version.

The reason is simple. Once their name is off the return, inflated deductions, invented dependents, and fictional business losses carry no consequence for them. The IRS sees a taxpayer who filed their own return and claimed things they cannot support. You owe the tax, the interest, and the penalties, and the preparer is gone, often with a slice of the refund.

Warning signs, roughly in order of severity

• They will not sign the return or give you a PTIN. Stop here. Nothing else on this list matters.
• The refund goes anywhere but your own account. Read the routing and account numbers on your copy before it is filed. Your refund goes to your bank, in full.
• They ask you to sign a blank or unfinished return. You would be swearing, under penalty of perjury, to numbers you have not seen.
• The fee is a percentage of your refund. That pays them to make the refund bigger, which is the opposite of what you want from the person attesting to your income.
• They promise a refund before seeing your documents. Nobody knows your refund before they know your numbers. A guarantee up front means the number is the goal, not the result.
• They advertise bigger refunds than anyone else. Your refund is set by your finances and the tax code. Every honest preparer working from the same documents lands in the same place.
• They call themselves a CPA and cannot show a 1101 license. Michigan-specific, and covered next.
• They add deductions you cannot document, or ask you to. Donations you never made, a home office you do not have, dependents who are not yours.
• They will not give you a copy of the filed return. You are entitled to it. Get it before you pay.
• Cash only, no receipt, no written fee, no permanent office. A pop-up that closes in April cannot help you in October, when the letter arrives.

The Michigan check: read the license number

In Michigan a CPA claim can be tested in a minute, because the state publishes license numbers and the first four digits carry the meaning. The Michigan Board of Accountancy issues three credentials:

• 1101, Licensed Accountant. Cleared for what the board calls the unrestricted practice of public accounting. This is the credential a paid preparer calling themselves a CPA should hold. Every listing on this site is an active 1101 license.
• 1103, Registered Accountant. Holds the CPA certificate but, in the board's words, may "only use the title and shall not engage in the practice of public accountancy." Preparing returns for the public on a 1103 number is a red flag that only Michigan lets you spot from the number alone.
• 1102, Accountancy Firm. A licensed business, not a person. A firm number does not tell you who inside it is licensed.

Ask for the number, then search it on LARA's Verify a License page (opens in new tab). It hands off to the MiPLUS lookup, where you search by name or license number and open the record. Our verification guide walks through the lookup and what to do when a name does not come up. A name that returns nothing, a 1103 record, or a status other than active is your answer.

Two newer variants to know in Michigan

Preparer fraud has a cousin: impersonating the tax authority. Both of these work by pressure, and both fall apart the moment you stop and check.

• The fake city tax collector. Twenty-four Michigan cities levy an income tax, and most run their own income tax office, forms, and notices. That gives a scammer a plausible script: "This is the city income tax division, you have an unpaid balance, pay now to avoid a warrant." A real city office writes to you. It does not demand gift cards, a wire transfer, or a card number over the phone. Hang up, find the income tax office number on the city's own website, and call it. Detroit is the exception to the local pattern: its city tax is administered by Michigan Treasury, and Flint moves to state administration on January 1, 2027, for the 2026 tax year.
• The Michigan Treasury impersonator. Treasury contacts taxpayers by mail. A phone call, text, or email that claims to be Treasury and asks for a payment, a Social Security number, or bank details is not. If you did receive a letter, check it against your own account in Treasury's eServices, reached from michigan.gov/taxes, before you respond. Real notices show up there; invented ones do not.

Why "I'll just amend it later" does not work

When the IRS or Michigan Treasury questions a return, the letter goes to the person who signed it. That is you. A preparer with no credential has no authority to represent you before the IRS, so even a well-meaning one cannot argue your case. Only a CPA, an enrolled agent, or an attorney can, which our guide to the three credentials explains in more depth.

In practice, the downside of a bad preparer is not a wasted fee. It is back taxes and penalties, assessed against you, with nobody obligated to help you resolve them. In a city with an income tax, it can be three letters, not one.

Five minutes of prevention

• Verify the credential yourself. If they say CPA, look up the number on LARA's lookup and confirm it starts with 1101. If they say enrolled agent or another credential, the IRS directory of credentialed preparers (opens in new tab) lists them by ZIP code.
• Ask for the PTIN before you hand over anything. An honest preparer gives it without hesitation. Reluctance is data.
• Read every return before signing. Federal, Michigan, and the city return if you owe one. Check the income, the dependents, the deductions, and the bank account on the refund line. You do not need to understand every schedule to notice a deduction you never mentioned.
• Get the fee in writing, in advance. A flat fee or an hourly rate, never a share of the refund.
• Confirm they will be reachable after April. Notices arrive months later, and some city returns are not even due until April 30.

If it already happened

Acting quickly and on your own initiative counts for a great deal here, with the IRS, with Treasury, and with your eventual bill.

1. Get a copy of what was actually filed. If the preparer will not provide it, request a transcript from IRS.gov.
2. Amend anything false, on the federal return and on the Michigan return. Voluntary correction is treated very differently from being caught.
3. Report the preparer to the IRS with Form 14157, and Form 14157-A as well if they filed or altered your return without your consent.
4. If they claimed to be a CPA, report them to LARA. The Michigan Board of Accountancy (opens in new tab) is administered by LARA's Bureau of Professional Licensing, which can act against a license and against a false claim of one.
5. If your refund was diverted, file Form 3949-A and contact your bank.
6. Keep everything. Texts, receipts, business cards, the ad you answered.

This guide is general information, not tax or legal advice. Forms and procedures change. Confirm current requirements with the IRS, Michigan Treasury, or a licensed professional before acting.

Frequently asked questions