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Texas Tax Defense Attorney for Licensed Tax Professionals

Tax professionals accused of negligence, fraud and other forms of misconduct can face risks on multiple fronts. Not only can these types of accusations lead to professional licensing action, but in many cases they can lead to malpractice litigation as well. In the most severe cases, they can also lead to scrutiny from the Internal Revenue Service (IRS). The IRS has enhanced its focus on tax professionals in recent years, and tax professionals targeted in IRS investigations must promptly engage an experienced Texas tax defense attorney to help them avoid unnecessary consequences.

At Brown PC, we defend licensed tax professionals in disciplinary, civil and criminal matters. We focus on handling cases involving serious allegations and substantial exposure, and many of our engagements begin when tax professionals contact us to help them with IRS investigations. If you are facing scrutiny in your professional capacity, we invite you to get in touch to discuss how we may be able to help.

Common Allegations Against Tax Professionals in IRS Investigations

Federal investigations targeting licensed tax professionals often target a handful of specific allegations. While these are not the only potential charges that can flow from an IRS investigation, they are among the most common:

Aiding and Abetting Tax Evasion or Tax Fraud

Aiding and abetting tax evasion and tax fraud are federal crimes under Section 6701 of the Internal Revenue Code. “Aiding” and “abetting” are both very broad terms that allow the federal government to pursue criminal charges against tax preparers in a wide range of circumstances. Recommending unsupportable tax positions, assisting with hiding income or claiming fraudulent deductions, and helping to establish unlawful offshore tax avoidance schemes are just a few of numerous examples.

Preparing and Filing Frivolous Returns

Knowingly helping taxpayers prepare and file frivolous returns can also lead to criminal charges for licensed tax professionals in many cases. While receiving insufficient or inaccurate information from a client can serve as a defense in some cases, tax preparers must be able to demonstrate that they met their due diligence burden in order to assert this type of defense. Even then, tax preparers must be able to convince the IRS that their reliance on their clients’ representations was reasonable in order to avoid liability.

Promoting Abusive Tax Shelters

The IRS has placed particular emphasis on targeting licensed tax professionals who “promote” abusive tax shelters in recent years. These include various types of trust arrangements, syndicated conservation easements and loss importation transactions, among others. Licensed tax professionals targeted as promoters can face serious criminal charges, and avoiding a federal indictment requires a coordinated, strategic and proactive defense.

Facilitating Paycheck Protection Program (PPP) or Employee Retention Credit (ERC) Fraud

The IRS has also placed particular emphasis on targeting licensed tax professionals who have helped to facilitate Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) fraud. Widespread fraud under these programs has cost taxpayers billions of dollars, and the IRS is now working alongside the U.S. Department of Justice (DOJ) to pursue charges against tax professionals who assisted their clients with filing fraudulent applications, returns and loan forgiveness certifications.

Conspiracy to Commit Tax Evasion and Tax Fraud

Conspiracy is a common allegation in IRS investigations targeting licensed tax professionals as well. Due to the breadth of the federal criminal conspiracy statute, the IRS and DOJ can pursue conspiracy charges against tax preparers in a wide range of circumstances as well. In federal conspiracy cases, tax preparers can face the same penalties as their clients, and tax advice does not have to lead to “successful” tax evasion or tax fraud to warrant prosecution.

Common Allegations Against Tax Professionals in Civil Litigation and Professional Licensing Matters

While civil litigation and professional licensing matters can (and frequently do) involve the allegations listed above, they can involve many other allegations as well. Other common allegations against licensed tax professionals in these matters include:

Negligence

Tax preparers can face civil liability in professional malpractice litigation and disciplinary action in professional licensing proceedings based on negligence. Specific negligence allegations can take many different forms; and, when accused of negligence, it is critical to identify the specific allegations against you so that you can formulate a targeted defense.

Improper Interpretation or Application of the Law

One example of a specific negligence allegation that is common in professional malpractice litigation and professional licensing proceedings is improper interpretation or application of the law. Essentially, this involves an allegation of providing “bad advice.” When taxpayers face IRS audits or investigations due to positions that they took based on their tax professionals’ advice, they will frequently engage counsel in an effort to hold their tax professionals accountable.

Fraud and Embezzlement

Allegations of fraud and embezzlement committed against tax professionals’ clients can lead to multiple forms of litigation as well. Even if these types of allegations do not trigger criminal scrutiny, they can still expose licensed tax professionals to substantial liability and the possibility of license suspension or revocation.

Conflicts of Interest

Engaging in conflicts of interest, including transactions that involve self-dealing, can likewise create exposure on multiple fronts. These cases tend to be especially intricate and complex, and executing an effective defense strategy will usually begin with gaining an accurate understanding of the facts and contrasting this understanding with the client’s allegations.

Other Ethics Violations

Along with fraud, embezzlement and conflicts of interest, allegations of other ethics violations can also present legal, financial and professional risks. Again, if you need help defending against any type of allegations as a licensed tax professional in Texas—whether in connection with an IRS investigation or otherwise—we encourage you to contact us promptly about consulting with a Texas tax defense attorney at Brown PC.

Request an Appointment with a Texas Tax Defense Attorney at Brown PC

To request an appointment with a Texas tax defense attorney at Brown PC, please call 888-870-0025 or contact us confidentially online. If we are not available immediately, we will respond as soon as possible.