Tax fraud involving fraudulent tax returns takes down another tax preparer—this time an examiner for the IRS.
As we have mentioned before, individuals who prepare and file tax returns for others are in a position to be tempted by tax crime. While a taxpayer working on their own return impacts only their individual filing, a tax preparer can impact the return—and refunds—of many.
This story is slightly different because the tax preparer in hot water on this one, Ms. Linda Williams, was also a tax examiner for the Internal Revenue Service (IRS). Not only would Ms. Williams have detailed knowledge about fraudulent tax returns, but also how those crimes are detected and addressed. As a tax preparer for friends and family, Ms. Williams would also clearly understand the time behind the crime of rigging tax returns.
In this case, the lure of the ill-gotten refunds proved too much. Tax return fraud often centers around increasing allowable deductions or misstating or hiding income. Ms. Williams chose three particular deduction areas in order to boost refunds due to the taxpayers who became her unknowing victims. Between 2015 and 2017, Ms. Williams overstated the number of business expenses, medical expenses, and charitable donations offered by many of those for whom she filed taxes. After filing the taxes, Ms. Williams collected the refunds and then disbursed returns to the taxpayer—minus a portion of the refund that Ms. Williams had transferred to her own bank account.
Overall, Ms. Williams was charged with ten counts of filing false tax returns. She has certainly lost her income, and seriously damaged, if not eliminated, her career. Given that her fraud damaged tax returns and drew those closest to her into an IRS criminal investigation, it is likely many personal bridges were burned as well. Ahead of her, Ms. Williams faces tax litigation, up to three years in prison and a fine of $250,000.
There are many forms of tax fraud. Some involve offshore tax havens while others involve payroll tax issues and compliance around FBAR reporting. A key similarity for all of these tax controversies is getting seasoned criminal tax defense help before the IRS lands on your doorstep. Part of the reason we bring you these narratives is to try and help business owners and operators avoid the future faced by Ms. Williams.
If you are in over your head with any kind of criminal tax matter—you likely already know it. Now is the time to seek seasoned legal advice.
Speak with an experienced tax attorney when challenged with an IRS audit or criminal tax investigation
The tax group at Robert J. Fedor, Esq. LLC offers strategic representation to clients throughout the USA and abroad from offices located in Cleveland and Chicago. From payroll tax issues to charge of criminal tax fraud, we can help. Schedule a free consultation by calling 800-579-0997 or contact us today.