Identity Theft Enhances Fraudulent Tax Return Charges against Tax Preparer

identity theftHired to prepare tax returns, Texas tax preparer Shermin Marshall instead schemed to divert funds for his own use.


It is not unusual to hear about an IRS criminal tax investigation into the actions of a tax preparer.  Those who prepare tax returns for others have a method and often a motive to file false tax returns that unjustly enrich their clients and themselves.


In some cases, like the matter against Mr. Marshall, the tax preparer makes unwitting victims of their clients by filing fraudulent tax returns that enrich only the tax preparer—not their client. 


One of the “Dirty Dozen” Tax Scams


Disreputable tax preparers are a perennial entry on the IRS list of the worst tax schemes.  While sometimes clients are in cahoots with tax preparers to reduce tax exposure and liability, in other instances, it is the tax preparer who is exploiting clients to skim refunds.  In all, Mr. Marshall racked up an impressive 14-count indictment including preparation of false tax returns, wire and tax fraud, and aggravated identity theft.


In many of these cases, tax preparers like Mr. Marshall purposefully create fake household income, change filing status, alter dependent numbers, and generally falsify returns in order to increase tax refunds.  According to the IRS criminal tax audit, the scam by Mr. Marshall began in 2012.


As everyone knows, identity theft is a serious matter.  Because he had access to the social security and other confidential information of his clients, Mr. Marshall was able to create financial accounts on their behalf but without their knowledge.


Mr. Marshall, who solely managed the accounts, then directed a portion of each tax refund into the account and paid out the rest to his clients without their knowledge that their personal and professional information was being used to milk the IRS of higher refunds in their name.


After initially pleading not guilty, Mr. Marshall eventually admitted to the charges against him.  As a result, Mr. Marshall loses his livelihood and liberty for three years, plus three years of probation and almost $400,000 in restitution to the IRS.  Unless he sets up shop elsewhere, it is not likely Mr. Marshall will be preparing tax returns anywhere near his hometown of Killeen anytime soon.


Tax preparer fraud is common.  With access to the right information and detailed knowledge of how the system works, tax preparers may find it easy to pocket extra dollars at the expense of their client and the IRS.  As a leading criminal tax charge brought by the IRS, tax preparer fraud is not going away anytime soon.


When you file any tax documents, whether it is your return or an offshore tax filing, be sure you use a reputable tax preparer or accounting firm.  While it is true that the most trusted professionals can be swindlers, due diligence is important.  If you are a tax professional who has filed false income tax returns, speak with an experienced tax attorney before you are charged with criminal tax fraud.


Chicago tax attorneys provide knowledgeable help with civil and criminal tax matters


Serving international and local clients from offices in Chicago, and Cleveland, Illinois, the IRS tax lawyers at Robert J. Fedor, Esq., LLC deliver knowledgeable, discrete legal service if you face a tax crime or have a question about a civil tax audit. Call us at 800-579-0997 today.