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IRS continues crackdown on tax preparer fraud, uses NY business as an example

On Behalf of | Nov 2, 2022 | Criminal Tax Issues

The Internal Revenue Service (IRS) is continuing its crackdown on tax return preparer fraud. The IRS has had this crime on their list of the dirty dozen for years, representing it as one of the worst tax crimes in our country. Their efforts have proven successful. In the past 10 years the feds have taken down hundreds of tax preparers for various tax crimes. In the most recent example, the feds went after a business that operated in New York.

What does a tax return preparer fraud case look like?

This crime generally involves fraudulent practices during the preparation and filing of income tax returns. This can be done in a variety of ways. The IRS notes that some of the common examples include inflating personal or business expenses and taking improper credits or deductions.

In a recent example, the Department of Justice recently released information on a case out of New York involving a tax preparation business. The government claims the business was using fraudulent practices to prepare tax returns. These practices allegedly included:

  • Improper head of household claims on returns
  • Fraudulent dependent exemptions
  • Improper claims of losses

The federal court permanently barred the business from operating as a tax return company and required it pay $150,000 in fees to the United States government.

It is important to note that allegations of tax evasion can come with serious penalties. This is a felony and can come with up to 5 years imprisonment and a $250,000 fine.

How can businesses protect themselves from allegations of fraud?

There are many things to do to protect your business. One of the most important steps is to keep records to help defend against allegations of tax return preparation fraud. If accused of tax crimes, the penalties are serious. Do not take these allegations lightly. The attorneys at Goldburd McCone are familiar with these issues and can build a defense on your behalf.