Tax fraud involving annual tax returns can be carried out easily—but the cost is high for those who falsify records. The same holds true for businesses and individuals whose returns are intentionally inaccurate.
Whether you are filing a personal or corporate tax return, getting qualified assistance with your return is crucial. The Internal Revenue Service (IRS) routinely warns business owners and taxpayers to be cautious of individuals who prepare tax returns without appropriate experience, credentials or honesty.
Case in point: Georgia ghost preparer runs into an IRS criminal investigation
A 40-year-old woman, Kim Brown, operated a home-based business providing tax preparation services in Augusta, Georgia. Brown’s operation was a classic "ghost" operation and her behavior ticked almost all the boxes associated with return-related tax fraud.
Along with an accomplice, Brown invented income figures to qualify clients for fraudulent tax credits and created false deductions on the returns she prepared. In addition to being illegal, this boosted the amount of the refund for which her clients were eligible, and she took a portion of that return as her fee. Brown did not review returns with her clients, nor did she provide her clients with copies of their returns. In true ghost form, she failed to sign the returns as the preparer before filing them.
Overall, the IRS overpaid $541,912 in false income tax refunds in this matter, which is also the amount Brown will pay in restitution following her conviction. Brown pled guilty to two charges relating to false income tax returns and will serve almost two years in prison.
Watch your bottom line
Tax professionals can provide a variety of services but it is important to remember that the individual signing the return is responsible for the information provided. Even a company accountant who has provided financial service for years could be taking advantage of the position to run a scam. Checks and balances are important.
If you are a ghost preparer or longtime tax professional looking for an exit strategy—speak to an experienced tax attorney for help.
Concerned about being charged with tax fraud?
If you are aware your tax returns are false or are a tax preparer who has prepared fraudulent returns, your best defense is skilled legal representation. Talk with an experienced criminal tax attorney at our firm for straightforward information and options. Call us at 440-250-9709 or reach out to set up a consultation. We serve domestic and international clients from offices in Cleveland and Chicago.
Not sure what to expect if you are already under scrutiny? Download our free ebook, Understanding Tax Fraud, for insights into warning signs, and potential legal defenses.
