Taking care of tax business
E-filing edging up

An alleged tax wolf in sheep's clothing

Harry Willner, an IRS agent since 1974, has been charged with tax fraud. Irslogo1_3 Federal prosecutors in Manhattan allege that Willner was part of a group that evaded taxes by manufacturing false business deductions for a company Willner operated out of his home. The Fair Lawn, N.J., resident was arrested Monday and subsequently released on his own recognizance.

The amount of the alleged fraud: $758,000 claimed as a "bad debt" from 1998 through 2001. The resulting tax evasion on his personal return, prosecutors say, was almost $21,000 over four years. The potential time in jail for Willner: 18 years. Details on the alleged scam can be found at Kiplinger, the Associated Press and WNBC.

This raises so many questions. First among them, what was this guy thinking? OK, he was thinking $$$$$. But beyond that, is this instance of a long-time employee abusing our tax laws also an indictment of our tax system?

Or does it just show that alleged crooks are everywhere? That disgruntled employees are in every office and are always trying to put one over on the boss?

Does it indicate that our tax laws are so complex that it takes someone with long-time inside knowledge to pull off a high-dollar scam?

And, of course, is there no one we can trust?

Unfortunately, there's one indisputable answer. Tax protesters are going to have a field day with this, arguing that if this happens within the agency charged with collecting our taxes, that's just further evidence that they shouldn't comply.

You always hate to see the proverbial one bad apple ruin things, but this case certainly will mean that folks will be sniffing around the tax barrel and its vendors a bit more.

You can read the 12-page indictment of Willner here; thanks to TaxProf for the link.


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Clever Dude

Having worked as an IRS contractor, I have learned that the IRS scrutinizes its employees' tax returns much more than the normal taxpayer. A 30-year IRS veteran coworker (who is now a contractor as well) had to answer 3 levels up to why he misstated $41 on his return.

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