A man who pleaded guilty to preparing fraudulent tax returns has recently been sentenced to federal prison and will also owe hundreds of thousands of dollars in fees to the IRS. The case is an example of the serious consequences that the Department of Justice can impose when the IRS believes a taxpayer has included improper deductions or exemptions on their tax return.
False deductions included to increase business
Postal Tax Services was a tax preparing business operated by Houston resident Yomi Michael John. The US Department of Justice initiated a criminal case against John for preparing false returns for individual customers between 2010 and 2012. John pleaded guilty to the charges, admitting that he fabricated deductions, business losses, and tax credits for 61 of his customers’ tax returns, all without their knowledge. John explains that he falsified these deductions and exemptions in order to drive up the amount of the refund his clients would receive, thus growing his reputation as a tax preparer and driving up business. John was sentenced to one year and one day in prison, followed by a year of supervised release. He has also been ordered to pay $212,853 in restitution to the IRS, which is the amount by which the IRS claims he inflated his clients’ tax refunds.
Fraud by tax preparers could become client’s problem
Fraud among tax preparers isn’t common, but it can be a major problem for the clients of preparers who include false information on returns. Even when preparers aren’t instructed by the client to include false deductions, exemptions, or business losses on a return, the client is ultimately responsible for the information included on their tax return. When you’re having your taxes done by a professional tax preparer, make sure you choose your preparer carefully. Watch out for preparers who guarantee you a large return; there’s no way to know how large your return will be without first being very familiar with your finances, and a willingness to promise a big return could indicate that the preparer plays fast and loose with the rules. Review the return your preparer creates carefully before signing it, and ask about any deductions that seem questionable or inappropriate. If your return is ultimately flagged by the IRS, be sure to contact a skilled Texas tax attorney for help, to ensure that you aren’t unfairly penalized for a preparer’s misdeeds, and that the fraudulent tax preparer is brought to justice.
If you need help with an IRS issue or audit in Texas, get help from a dedicated and effective tax attorney by contacting the Tyler offices of the Scammahorn Law Firm at 903-595-1000.