The federal government has come down hard on tax preparation professionals who allegedly misused the Economic Injury Disaster Loan (EIDL) program. In its most recent example, the government was able to build a strong case against four professionals — resulting in an argument strong enough to convince the court and get them all time in prison.
What were the charges?
The government claimed the professionals fraudulently applied for relief through the EIDL program. They presented evidence that the group of four submitted hundreds of applications over the span of three months in 2020.
As a result of these applications, the government claimed the group fraudulently received $745,000.
What were the penalties?
The courts were harsh in their sentencing. Penalties included:
- Prison time. Prison sentences ranged from four years to 18 months.
- Restitution. The court also required the professionals repay the government. The payments ranged from $31,000 to $17,900.
- Fines. Additional fines were also issued. The court fined the ringleader $10,000.
- Probation. The court also required federal probation.
It is also important to point out that the court also forbad at least one offender from returning to work at a tax preparation business.
What can other tax return preparation professionals learn from this case?
The government is aggressively pursuing allegations of fraudulent use of EIDL and other relief programs. Those who are the target of such an investigation are wise to take the matter seriously. As noted above, a conviction can result in prison time, hefty financial repercussions, and the inability to return to work in your chosen profession.
The attorneys at Goldburd McCone are experienced in these types of tax issues. We can work with you to review the allegations and build a defense to better ensure your interests and rights are protected throughout the process.