Noncompliant IDs were used at scale
The Treasury Inspector General for Tax Administration found that more than 38,000 paid return preparers used noncompliant Preparer Tax Identification Numbers on more than 2.2 million returns processed through October 2025. Noncompliant includes inactive statuses such as expired, revoked, suspended, retired or deceased.
The lower-bound average is more than 57 returns per identified preparer. That calculation describes workload concentration, not the number of fraudulent returns: TIGTA expressly says a noncompliant PTIN does not make a return invalid or fraudulent.
| Finding | Published amount |
|---|---|
| Preparers with noncompliant PTINs | More than 38,000 |
| Returns prepared | More than 2.2 million |
| Refund-only preparer subset | Nearly 12,000 |
| Refund-only Forms 1040 | About 95,000 |
| Refunds requested on that subset | Nearly $600 million |
A higher-risk subset requested large refunds
Nearly 12,000 of the preparers filed about 95,000 Forms 1040 that requested refunds only, totaling nearly $600 million. Dividing those rounded figures produces about $6,316 requested per return, but the report does not say that amount was paid or improper.
TIGTA separately identified 2,044 preparers with characteristics of an overstated-withholding scheme on tax-year 2023 and 2024 returns requesting about $740 million. About 84% were uncredentialed. Those figures should not be added to the $600 million subset because categories may overlap.
Available penalties were used sparingly
TIGTA estimated the IRS could potentially have assessed nearly $92 million in penalties for use of noncompliant PTINs and that about $420,000 in renewal fees went uncollected. The penalty estimate does not subtract penalties already assessed and is not cash guaranteed to be recovered.
The report also found 691 IRS employees held active PTINs and that more than 90 may have prepared returns for compensation; TIGTA did not independently verify compensation. The IRS agreed with the recommendation to finalize a strategy covering outreach, penalties, employee PTIN policy, promoters and ghost preparers.
Method and limits
What’s the Scoop With Broach examined TIGTA's 25-page report, recomputed the lower-bound return average and refund-request average, and kept noncompliance, suspected scheme characteristics and proven fraud as separate categories.
The findings concern IRS records and TIGTA's tests. They do not establish wrongdoing by every preparer or taxpayer in the populations described, and requested refunds are not the same as paid losses.