For many taxpayers, tax season is over. However, if your company or tax return is a complicated landscape, you may have yet to file. What is your confidence level about the individual or business that is preparing your return?
Throughout the year, the Department of Justice reports on schemes and scams busted by the Internal Revenue Service (IRS). Tax fraud perpetrated by disreputable tax preparers is one of the most common tax crimes pursued by the IRS.
While failure to file or submitting a fraudulent tax return are serious criminal tax charges, many consumers and businesses do not take the time to review the credentials or record of their tax professional. The only strict credential required to prepare the tax returns of others is an IRS Preparer Tax Identification Number (PTIN). Beyond that, it is buyer beware. Here are just a couple of the recent cases prosecuted by the IRS:
- A preparer in Charlotte, North Carolina will serve two years in prison for creating false income tax deductions to gain Earned Income Credit on tax returns she prepared. The defendant submitted 500 tax returns to the IRS.
- A Florida CPA will serve 39 months in prison for tax evasion for failure to file returns for the years 2004 through 2008, in addition to other charges. The prison sentence is accompanied by a fine of over $1 million.
- A Mississippi CPA was convicted in February, 2019 and will face sentencing in May for preparing and filing false tax returns, including his own.
These defendants include Certified Public Accountants (CPAs). Whether fully educated in their field or operating a tax season pop-up business, your choice of tax preparers or accountants has a direct impact on your personal and professional financial standing.
The non-profit consumer watchdog, Consumer Reports and the IRS offer straightforward advice for choosing a reputable tax preparer. Tips include:
- Check the credentials of your preparer: The IRS provides a Directory of Federal Tax Return Preparers as a tool for finding qualified tax assistance. There are also search tools for CPAs and tax experts from association resources. Conduct an online search, ask for references—and check them.
- Look for a preparer familiar with your background: If you have complicated tax filings, including FBAR or FATCA filings, it is critical for you to work with an accountant or attorney capable of preparing a tax return that responds to all of your financial needs. Read carefully through your return and ask questions before signing on the bottom line.
- Speak up if there are problems with your return: If you are alerted by the IRS to problems with your return, speak with your tax preparer immediately.
You can file a complaint with the IRS if you have financial exposure due to a tax preparer. If contacted by the IRS for a civil or criminal tax audit—speak with an experienced IRS tax attorney in your area before responding to the letter or phone call.
Experienced legal representation with IRS audits or criminal tax defense in Cleveland and Chicago
From offices in Cleveland and Chicago, the law offices of Robert J. Fedor, Esq., LLC provide confidential, knowledgeable legal representation and strategic tax solutions to challenges of tax fraud, offshore tax issues, and criminal tax matters. Call us at 800-579-0997 or contact us today.