Preparation of personal and business returns gives tax professionals access and the opportunity to commit tax fraud. Have you crossed the line while working for a company or individual taxpayer? Do you worry about the IRS?
In the last two years, the Internal Revenue Service (IRS) has upped its game in the pursuit of tax preparers who prepare false income tax returns in partnership with taxpayers, or those who defraud their clients and quietly disappear after collecting a fee. Tax professionals are held to high standards by the IRS. Correspondingly, tax preparers who file fraudulent returns or create fictitious supporting documentation may find themselves the subject of an IRS criminal tax investigation that leads to criminal tax charges. If the scam fits the bill, a tax preparer can be charged with a felony.
Recent cases prosecuted by the Department of Justice (DOJ) against tax preparers illustrate common threads of tax preparer fraud. In a Mississippi case, a preparer was sentenced to over two years in prison for preparing tax returns for a client which overstated income withholding, retirement credits, and included false education credits. The preparer will also pay approximately $70,000 in restitution as part of his sentence. Two tax preparers in North Carolina recently pled guilty to preparing false tax returns. They each face a potential five years in prison as well as financial and other penalties.
In order to successfully prosecute a tax professional for tax fraud, the government works to prove the preparer willfully prepared a tax return he or she knew to be false. Tax returns require a signature acknowledging penalties of perjury. When a preparer makes a material statement on a return that they know to be false and sign the return, the falsified return speaks for itself.
Tax preparer fraud is easy to commit. As we have written so many times—it is critical to reach out to an experienced criminal tax defense attorney as soon as possible to try and mitigate the charges that could be made against you. The IRS encourages taxpayers to report the misconduct of tax preparers and provides a form of affidavit to those who believe they have been defrauded by a tax preparer.
Do not wait for a client or the IRS to question tax returns you may have fraudulently prepared. Reach out to a qualified tax defense attorney for experienced help and strategic options to address, mitigate, or clear allegations you may face from the IRS.
Speak with our experienced tax attorneys if you are facing an IRS audit or criminal tax charge
Serving local and international clients from offices in Chicago and Cleveland, the legal team at Robert J. Fedor, Esq., LLC delivers strong representation and guidance for those facing criminal tax litigation, payroll tax issues, or compliance questions. Call 800-579-0997 or contact us online today.