IRS 'tax pro' faces charges, emphasizing need to carefully check out paid tax preparers
Wednesday, January 15, 2020
A lot of former Internal Revenue Service employees take the lessons they learned on that job and create second careers as tax advisers and preparers.
That's a nice professional segue. Going from being part of the U.S. tax collection machine to helping folks pay Uncle Sam as little as legally possible.
But it needs to be done after IRS employees leave their government job.
One current IRS staffer in the agency's Andover, Massachusetts, service center was, to borrow a tax term, double dipping.
Worse, federal prosecutors say she filed almost 600 false tax returns, which have resulted in federal criminal charges.
Jennifer Beth True, 44, of Lawrence, Massachusetts, was formally charged with wire fraud and aggravated identity theft on Jan. 14 in a Boston federal courtroom.
The charges, according to the U.S. Attorney's Office for the District of Massachusetts, cover returns filed from 2012 through early 2018, including a fake one she allegedly submitted in 2015 for herself.
Side job not allowed: The 44-year-old True has worked for the IRS for more than 22 year, according to the charging documents. Her current position is as a Lead Contact Representative, requiring her to assist team members in responding to difficult and complex taxpayer inquiries.
In order to do her IRS job, prosecutors noted that True has been trained in tax law, ethics, information protection and disclosure, privacy, identity theft and identity protection.
IRS rules for all its employees prohibit them from "engaging in the preparation of tax returns for compensation, gift, or favor."
True allegedly ignored that rule.
Prosecutors say she received between $40 and $100 per return that she prepared, completing the vast major of the returns by using a consumer tax software product on her personal computer.
Alleged false claims on returns: The return filings, however, went beyond just preparing and submitting 1040 forms to the IRS in violation of agency rules, according to the charges against True.
Federal investigators say that between approximately February 2012 and April 15, 2018, True prepared at least 70 federal individual income tax returns for others that "included materially false items such as false individual retirement account deductions, false medical expenses, false and inflated unreimbursed business expenses and/or false tax preparation fees."
Other returns, according to the filing against True, included false child and dependent care credits.
True also allegedly amended one taxpayer's income tax returns for three prior years, in order to claim false deductions.
Investigators say that many of True's clients told them that they had not provided her with the false information and that they did not know that True was including false claims on their returns.
Making it personal, too: On a more personal level, federal prosecutors say that True's own 1040 for tax year 2014 that she electronically filed in February 2015 contained false info.
True allegedly claimed seven dependents on that return, helping reduce her tax liability for that year.
The problem, according to the charges against True, is that one of those she claimed was not a legitimate dependent, but rather a person who had hired True as a tax preparer. That client told investigators that she never gave True permission to claim her as a dependent.
Check out your preparer: One of the key admonitions given taxpayers in seeking professional tax help is to always thoroughly check out the person you hire to do your taxes.
I get where some of True's clients thought they were getting a good deal. She worked at the IRS, for heaven's sake. She had been with the tax agency for decades. She, of all people, should know the tax laws.
But knowing and complying are two different things.
I also get the attraction of hiring someone you know. Surely your brother-in-law or cousin or your best friend's sister will do you right when it comes to your taxes, right? Well, maybe not.
I'm not saying that everyone you know personally who does taxes is suspect.
I am saying that your personal and emotional connections are not nearly enough to rely on when picking professional tax help.
And I'm definitely saying take the selection of a qualified tax professional very seriously. It's as important as the actual filing of your taxes.
Make sure you pick the paid preparer who bests meets your tax needs. Once that's done, thoroughly check out the preparer before handing over details of your tax life.
It's as step you can't afford (literally) to overlook since, unfortunately, the start of every tax season means the appearance of unscrupulous tax preparers.
How the IRS can help you pick: When it comes to picking a tax pro, there is a way the IRS can legitimately help you make your choice.
The federal tax agency has its own directory of preparers. This searchable online directory lets you look for preparers in your area who currently hold professional credentials recognized by the IRS or who hold an Annual Filing Season Program Record of Completion of continuing tax education programs.
As for those professional credentials that the IRS recognizes, organizations that represent these tax and financial pros also can help you find tax preparation help.
- American Academy of Attorney-CPAs (AAA-CPA) — AAA-CPA is the only organization comprised of individuals who are dually-qualified as Attorneys and Certified Public Accountants. Click the Find an Attorney-CPA.
- American Institute of Certified Public Accountants (AICPA) — The AICPA is the world’s largest member association representing the accounting profession. You can use its searchable map to find a CPA in your area.
- National Association of Enrolled Agents (NAEA) — NAEA is a professional society representing enrolled agents (EAs), who earn their licenses from the Department of Treasury by passing a three-part exam administered by IRS. The Find a Tax Expert button on this page will help you do just that.
- National Association of Tax Professionals (NATP) — NATP has members in all 50 states who focus specifically on federal tax preparation. Its Find a Tax Preparer link will give you a listing of member preparers.
- National Society of Accountants (NSA) — NSA and its state affiliates represent independent practitioners who provide accounting, tax, auditing, financial and estate planning and management services to individuals and businesses. Use its Find a Professional link to find a tax preparer or accountant near you.
Check out these IRS and other directories. Then check out your tax preparer!
You also might find these items of interest:
- 4 ways to be a better tax client
- Turning in tax pros who break bad
- IRS to get tougher on tax pros who want to join its programs
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