Man pleads guilty for falsifying tax returns in Ohio and other states

Recently, a man pleaded guilty to falsifying information on tax returns, costing the IRS nearly $280,000.

The Internal Revenue Service warns Ohio taxpayers against people who will try to take advantage of them during tax season. The agency offers tips to consumers, such as requesting the preparer's credentials and making sure that the person signs the document.

Unfortunately, people do fall victim to these scams. When that occurs, the person who commits the crime could face substantial penalties.

Falsifying returns

WHIO reports that between March 2009 and April 2010, a man from Atlanta prepared and filed tax documents for clients. Charging as much as $500 per return, the man falsified information in order to obtain large refunds for clients. According to court documents, the clients did not provide the man with incorrect information. Instead, the man simply claimed returns that he knew the people were not entitled to.

The man offered tax preparation services to individuals and businesses in Ohio as well as 14 other states. Federal prosecutors claim that his actions caused an actual loss to the IRS of $279,874 and an intended loss of $456,594. He pleaded guilty recently in a district court in Ohio, agreeing to pay the IRS nearly $280,000. He may also face as much as three years in prison, and he is no longer allowed to handle tax documents for anyone but himself.

The penalties

The penalties associated with tax fraud vary depending on the crime. Under the law, someone who makes false statements on a return could face up to three years in prison as well as fines of $250,000. Evading a tax payment could lead to up to five years in prison as well as a fine of $250,000. Fines for corporations that commit either of these can be up to $500,000.

Fraud vs. negligence

Given the complexities of the tax code, it can be easy for someone to make a mistake on a tax document. This is where intent plays an important role. The IRS understands that honest errors occur. It is possible that someone who makes a mistake may still be fined, but he or she will not necessarily face criminal charges.

On the other hand, someone who willfully deceives the government in some way may be prosecuted. Tax fraud can involve any of the following:

  • Filing a false return
  • Willfully avoiding tax payment
  • Failing to file a return
  • Making fraudulent claims

If an auditor notices a mistake, he or she can initiate an investigation to determine whether there was a willful intent or not.

People who have concerns about this topic should speak with a tax law attorney in Ohio.