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January 6, 2020


Tax preparers face serious penalties for errors: 3 examples

The Internal Revenue Service (IRS) keeps a close watch over tax return professionals. Tax preparers must file tax returns on behalf of their clients wisely, getting the best possible returns for their clients while remaining within the bounds of the law, or else faces serious consequences. Three recent cases provide an example of the severity of penalties that can result from an error.

Three tax preparers face criminal charges for tax return errors

The first case involves allegations a return professional filed over 500 false tax returns for over 300 foreign citizens over a span of ten years. The IRS claimed the actions led to over $2 million in fraudulent tax returns. Based on evidence gathered in this case, the agency was able to build a successful prosecution and the accused received a 14 months prison sentence. She is also required to pay the IRS $2 million in restitution.

A second case led the IRS to accuse a man of filing false returns for 630 clients from 2012 through 2015. The IRS states these false claims led to over $4 million in false tax claims. The court could sentence the accused to up to five years imprisonment for each criminal charge. He currently faces 12 charges.

The government also accused another tax preparer of underreporting his income on his own, personal tax returns from 2012 through 2017. The IRS states his intentional act led to over $140,000 in lost tax revenue. He faces three years imprisonment and a $250,000 as well as additional potential for mandatory restitution payments and the likely loss of the ability to continue in his chosen profession.

Options are available for tax return professionals accused of wrongdoing

It is important to note those who are under investigation for similar crimes have options. An attorney experienced in this niche area of tax law can review the allegations and build a defense to better ensure your rights are protected.