Selecting an honest, ethical and capable professional to handle tax issues for you or your business is important. Choosing the wrong tax-service provider could result in audit fraud cases if the person is dishonest, and levies or wage garnishments if the person does a poor job at preparing accurate returns. If fraud is discovered, the tax preparer is likely to face felony charges, but taxpayers could be tasked with paying back false refunds.
From 2003 to 2005, two men running a tax preparation business in the Dallas area allegedly bolstered expenses on tax returns to achieve deductions and credits that were unwarranted. Specifically, false education expenses were created so that the education credit would apply. This increased taxpayer’s refund amount.
One of the men involved remained a fugitive until November 2013. He pleaded guilty on April 30 in a Dallas court. His plea was for a single count of aiding in the preparation of a fraudulent return. According to court records, the man faces a $250,000 fine, required restitution and up to three years in prison. The second man in the case is still at large.
According to reports, the man who plead guilty had fled the country. The U.S. State Department’s Bureau of Diplomatic Security helped arrange extradition back to the country. The Internal Revenue Service is still investigation the case, according to reports.
When it comes to taxes, ignorance is not always an acceptable excuse. Taxpayers who benefit from false returns unknowingly may still be caught up in collection processes or criminal proceedings. Understanding your rights and the options for dealing with IRS collection processes helps mitigate negative consequences from such a situation.
Source: Newstime Africa, “Dallas tax return preparer admits preparing fraudulent tax returns” No author given, Apr. 30, 2014