Reminding us of the importance of properly prepared tax documents, the Internal Revenue Service (IRS) recently obtained a guilty plea from one tax professional and sued to shut another one down for preparing fraudulent tax returns.
As the tax season heats up, the IRS offers need-to-know information for 2017 federal income tax returns. Those tips include filing “complete and accurate” returns—advice that a Kansas City man probably regrets ignoring.
Owner of a Holcomb, Kansas business called Accounting Services, 60-year old Marcelino Almaraz provided tax services, including preparation of returns. Mr. Almaraz also owned a convenience store and allegedly generated some of his business due to his ability to gain large federal income tax refunds for his clients.
While the large returns garnered Mr. Almaraz a reputation, they also gained him the attention of the IRS. Investigators determined that Mr. Almaraz had inflated the returns of his clients by changing the filing status for some clients to gain more favorable returns, such as by fraudulently filing as head of household.
Mr. Almaraz also added fraudulent dependents to create and increase child tax credits. In one case reported in the local media, Mr. Almaraz added four grandchildren as dependents on the tax return of one client, although they did not live with him. Mr. Almaraz also underreported his own tax returns for 2010 and 2011.
A guilty plea
Mr. Almaraz pled guilty to filing a false income tax return and aiding in the preparation of fraudulent returns. The defendant agreed to pay $397,552, and will be sentenced in May. He faces prison time, fines, and supervised release.
In Arizona, the Justice Department sued to permanently close down Accountable Business Services Inc., a Phoenix, Arizona concern owned by Alfred George Decker. Like Mr. Almaraz, Mr. Decker was also in the business of fraudulently boosting federal income tax returns for his clients. Techniques employed by Mr. Decker included:
- Claiming personal expenses as personal deductions
- Incorrectly identifying expenses on tax returns to get around limits on certain types of deductions
- Altering tax returns for multiple business entities to reduce or eliminate the tax liabilities of a client
Mr. Decker has not yet had his day in court, but the federal action comes after Mr. Decker pled guilty to fraudulent preparation of a federal income tax return in an earlier case.
These cases point to the importance of engaging honest and forthright income tax professionals who appropriately prepare your tax documents. The fraudulent methods employed by these defendants are common and each man was no doubt simply hoping he would not get caught.
If you are aware of fraudulent or missing tax returns, or if you have not filed accurate reports as required on your foreign bank accounts, act now to protect your business interests—and your liberty. Work with an experienced tax attorney to rectify challenging and potentially criminal tax matters before you are contacted by the IRS.
Skilled legal service when you are at risk for an IRS criminal tax investigation
Serving clients nationwide from offices in Cleveland and Chicago, the law firm of Robert J. Fedor Esq., LLC delivers strategic, straightforward legal guidance on tax litigation, IRS audits, and criminal tax matters. Contact our legal team today.
