Tax preparation professionals must keep their clients happy while staying within the bounds of the law. This is not always an easy balance. However, a failure to manage this balance can result in allegations of criminal wrongdoing. Two specific allegations a tax preparer must avoid are those of enabling the commission of a tax evasion crime and failing to prevent such a crime.
How can tax preparers avoid enabling tax evasion?
The Internal Revenue Service (IRS) investigations the allegations of any action that encourages the commission of tax crime. This often includes a review for the use of inflated income or business expenses, omission of income, unexplained increases in worth or if a discrepancy in book keeping.
What about prevention of a tax evasion crime?
If a professional suspects a client’s action may be criminal, it is wise to encourage the client to seek legal counsel. In some cases, a client can avoid or reduce the risk of criminal prosecution through the use of a voluntary disclosure program. An attorney experienced in these matters can provide the client with counsel.
There are steps a tax preparer can use to reduce the risk of taking on a client potentially engaged in criminal activity. This can include the use of client acceptance policies and procedures. This can include the use of background checks.
What happens if a tax preparer is accused of tax evasion?
A tax evasion conviction can come with civil and criminal penalties. It is wise to take review by the government seriously. An attorney experienced in the legal issues faced by tax preparation professionals can build a defense.