Tax preparer accused of getting “excessive refunds” for clients

The federal government has continued its crackdown on tax preparation professionals. A recent case provides an example.

Details of the charges

The Department of Justice (DOJ) recently charged a tax preparation professional out of Georgia with fraud and false statements in a federal indictment. The charges are the result of allegations the tax preparer secured “excessive refunds” for multiple clients. The government has officially charged the professional with 36 criminal counts.

The government has accused the tax preparer of fraudulently claiming deductions to increase tax returns for 12 clients over a span of three tax years. This led to 36 allegedly false tax returns, resulting in the 36 criminal counts noted above.

According to the indictment, the supposed fraudulent returns resulted in $162,890 in illegal refunds.

Potential Penalties

The charges are serious. If convicted, the accused could face up to three years imprisonment, supervised release and additional monetary fines.

IRS strategies

The case may lead tax preparation professionals to wonder how the government determines which professionals to investigate. The government will use several different strategies before beginning an investigation, including:

• Whistleblowers. In some cases, the government will get a tip from an employee within the tax preparer’s business that warrants an investigation.
• Sting operations. The IRS is also known to send undercover agents posing as customers to see if a tax preparer will file fraudulent returns on their behalf.

Whatever strategy is used, those who find themselves the subject of an investigation by the IRS or other federal agency are wise to take the matter seriously. Discuss options with an attorney experienced in the legal issues unique to tax preparation professionals.