Robert J. Fedor, Esq., L.L.C.

Taxpayers reminded to be wary when selecting tax preparer

This tax season, many Ohio residents will likely rely upon the expertise and assistance of a professional tax preparer. While the majority of tax preparers abide by tax laws and their fiduciary duty to clients, there are some who fail to keep updated on tax codes or knowingly disregard these laws in an attempt to personally profit.

A married couple who ran a tax preparer business was recently sentenced for their role in filing fraudulent tax documents. According to court records, both individuals were accused of taking fraudulent tax deductions when preparing and filing clients' tax returns.

In total, these fraudulent tax deductions totaled roughly $360,000. Both individuals plead guilty to charges of tax fraud and the husband was sentenced to 36 months in prison and one year of probation. Additionally, he must repay more than $196,000 in restitution and his wife must repay more than $163,000. Both individuals have also been barred from working as tax preparers.

This case serves as a cautionary tale to those individuals and business owners who plan to use a tax preparing service this year. When making decisions related to hiring a tax preparer, the IRS's Criminal Investigation unit cautions taxpayers "to be very diligent when deciding who they select to prepare their returns."

Regardless of who prepares an individual's taxes, that individual is ultimately responsible for his or her tax documents. In this case it's not clear whether those individuals whose tax documents included fraudulent deductions will face criminal charges. In some cases, however, the IRS may choose to take legal action and pursue criminal tax charges against unsuspecting individuals.

Source: The Pasadena Citizen, "Husband and wife ordered to prison for falsifying client tax returns," Feb. 9, 2014

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