The Department of Justice recently charged a tax preparer of 30 counts of tax fraud. Of these allegations, 21 survived the initial stages of the process and made it to court.
What were the allegations against the tax preparer? A press release from The United States Attorney’s Office explains that the man was accused of obtaining individual tax identification numbers for undocumented immigrants so he could file tax returns on their behalf.
The DOJ also accused the man of attempting to claim the Child Tax Credit for children that did not live within the United States. This credit is only available for dependents that live within the United States for the majority of the tax year in question.
The government claimed the tax preparer “fraudulently claimed hundreds of thousands of dollars in refunds.”
What was the outcome? The tax professional was the subject of an investigation by the Internal Revenue Service (IRS) that lasted almost five years. The case went to trial and included a review of 30 tax returns filed by the tax preparer. The tax preparer maintained his innocence during the entire process.
His case was strengthened by two facts. First, there was doubt as to whether or not the clients signed documents attesting to their honesty with regards to the Child Tax Credit. Second, an IRS agent went into the accused’s office undercover and attempted to file a fraudulent return. The tax preparer refused to file the Child Tax Credit documents for the agent because the undercover agent did not qualify.
Ultimately, the judge and jury used these facts along with other information presented to find in favor of the tax preparer. The case provides an example of the long and difficult path that can follow allegations of tax fraud against a tax professional. Those who are in this situation can act to reduce these difficulties. An attorney can help.