Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call:
212-302-9400 or toll-free at 844-653-2873.

Goldburd | Goldburd McCone LLP

For nationwide tax guidance, call: 212-302-9400 or toll-free at 844-653-2873.

Serving Individual And Corporate Tax Clients Nationwide From Our New York, New Jersey, Florida And California Offices

Steven Goldburd and Benjamin A Goldburd

Since 1983, our tax firm has skillfully represented individuals and corporations across the United States and around the globe from our offices in New York, New Jersey, California and Florida.

Tax return professionals: What are the penalties for tax fraud?

On Behalf of | Mar 29, 2023 | Criminal Tax Issues

The Internal Revenue Service (IRS) expects those who take on tax professions to know and abide by the Tax Code. A failure to do so can result in various allegations of civil and criminal wrongdoing, including fraud.

Does the government really go after tax return professionals?

The government takes these types of crimes very seriously. It considers this niche area one of the IRS’ Dirty Dozen Tax Scams. This designation means the government is willing to put extra resources into cracking down on potential violations … and these resources have proven a worthy investment. Over the past decade, the government has been able to build successful prosecutions against hundreds of tax return professionals.

What types of penalties are possible in these cases?

Some recent examples of the types of penalties the government will pursue in these cases can include:

  • Barred from practice. The government can essentially end your career as a tax return professional by barring those accused of failing to follow the Tax Code from continuing business operations as a tax professional.
  • Monetary penalties. The court can also order the return preparer turn over funds it views were the result of the allegedly illegal activity. This can result in the expectation that the preparer pays the government anywhere from a couple thousand to hundreds of thousands and even millions.
  • Imprisonment. It is not uncommon for the government to push the court to impose a prison sentence in these cases. In recent cases the Department of Justice’s Tax Division was able to get convictions against tax professionals and prison sentences for 97 months and 50 months.

It is also important to point out that these cases often take years to build. The government worked on building a case for over five years in the example noted above to get a 97-month imprisonment sentence for the accused.

What can tax return preparers learn from these examples?

The government is persistent when it comes to investigating tax crimes. Do not brush off notice of an investigation or audit from the IRS. It is often wise to delegate these serious matters to the professionals. The attorneys at Goldburd McCone have experience with these types of cases and can advocate for your interests, better ensuring a more favorable outcome.