Preparer Tax Fraud Shows No Signs of Slowing

tax fraudThroughout the United States, tax preparer fraud is big business—what do you need to watch for if you use an accountant or tax preparer?

 

Our firm focuses solely on complicated tax problems—from offshore tax issues to defense of tax crime, IRS audits, and criminal tax investigations.  Many, if not most, of our corporate and high-asset clients routinely rely on tax professionals to handle their annual and other tax reporting responsibilities.

 

For the Internal Revenue Service, tax preparer fraud is a high-priority headache, and it could save you some grief (or penalties) to understand the warning signs of frauds and scams conducted by even high-end tax professionals.

 

Forms of fraud—recent examples from around the country

The IRS routinely brings criminal tax charges against preparers.  Tax fraud is serious for the accused and for their clients, especially if the client had knowledge, or should have known that a false tax return was filed on their behalf.

 

Here are a couple of recent IRS prosecutions:

 

  • A Charlotte, North Carolina woman pled guilty to “aiding and assisting the preparation of a false tax return.” The woman admitted to the most common forms of tax preparer fraud, enhancing expenses, creating fake deductions, and claiming education credits that were non-existent.  The amount of tax lost to the IRS from her conduct amount to approximately $500,000 and she faces up the three years in prison, probation, restitution, and penalties.

 

  • Facing similar consequences, a Rhode Island man also faced the long arm of the law for his habit of filing fraudulent tax returns between the years of 2011 and 2015. Like the North Carolina tax preparer, the accused sought to boost refund checks for his client by creating false deductions, and inflating expenses. He also amplified charitable donations and falsified home mortgage and home energy improvement deductions. 

 

  • On a larger scale, a pair of Southern Florida tax preparers were shut down by the IRS and face injunctions and the permanent loss of the livelihoods for their part in scamming the IRS and their clients. Using the same sorts of tactics described above, a tax preparation business inflated deductions and expenses on the tax returns of their client to increase the amount of the refund their client would receive.  When the refund returned, the tax preparers pocketed the excess without the knowledge of their victims.

 

The IRS cautions individuals and businesses to scrutinize their tax preparer on an ongoing basis.  If you can answer “yes,” to any of the following questions, proceed with caution:

 

  • Does your tax preparer ask you to sign a blank return or are you expected to file your return or other regulatory filings without careful review?
  • Are the fees you pay your accountant or tax preparer based on how much of a refund they claim to be able to provide for you?
  • Do you have concerns that your accountant or preparer may not have credentials or contemporary knowledge of recent legislative and tax changes?

 

Eventually corrupt tax preparers get swept up.  Be sure you are not caught in the net when they do.

 

Experienced tax attorneys serving local, national, and international tax clients

In Cleveland, Chicago, and internationally, Robert J. Fedor, Esq., LLC delivers decisive strategies and solutions for persons or entities facing tax controversy, criminal tax audit, or other tax challenge.  Contact us or call 800-579-0997 today.

 

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