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Former tax preparer gets 27 months in prison, ordered to repay Treasury $4.7 million

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Hiring a tax professional is not a task to take lightly.

Filing false tax returns gets tax preparer 2+ year prison term, order to repay $4.7 million to Treasury

You need to find tax help that fits your specific financial and tax needs. You then must make sure that the tax pro is just that. Professional. And reputable.

Unfortunately, there are too many purported tax pros who turn out to be crooks.

One of them, however, was caught and now will spend more than two years in federal prison. After he gets out of jail, he will face a year of supervised release.

Finally, the former tax preparer, who pleaded guilty to the fraudulent filing charges last November in a Maryland federal court, was ordered during his sentencing this week to pay back the more than $4.7 million in revenue that the U.S. Treasury never got because of his criminal tax actions.

1,000+ false returns filed: The Chula Vista, California, man, who committed the tax fraud while he lived in Baltimore, prepared and filed false income tax returns for his clients.

He used two fake filing approaches, according to court documents and statements made during the legal proceedings. He either fraudulently lowered the taxes his clients owed or, he filed returns that produced tax refunds to which they were not entitled

Prosecutors said the man typically reported fictitious or inflated business losses and itemized deductions.

To conceal his fraud from the Internal Revenue Service, the investigation revealed that he prepared and filed the returns in question as a ghost preparer, reporting that the taxpayers, not a preparer, had filed the returns.

In total, court records showed that he prepared more than 1,000 false tax returns. The total federal tax loss from these fraudulent filings reached $4,729,311.

Cost to taxpayers: Federal officials did not elaborate on the clients for whom the former tax preparer submitted false returns.

But victims of disreputable tax preparers often end up having to come up the missing tax money.

That's why it's critical, as noted at the top of this post, that you make sure you hire a qualified and honest tax professional.

Tax pro search tips: There are many types of tax return preparers, including certified public accountants, enrolled agents, and attorneys. These tax pros must meet professional standards and can represent clients before the IRS.

There also are tax pros don't have a professional credential, but who participate in the IRS Annual Filing Season Program. This voluntary program recognizes the efforts of return preparers who are not subject to professional qualification vetting, but who obtain a certain number of continuing education hours in preparation for a specific tax year.

Tax preparers who meet the requisite educational hours are listed in the IRS' public directory. The searchable, sortable database includes the name, city, state, and Zip Code of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, and enrolled actuaries with valid PTINs, as well as Annual Filing Season Program Record of Completion recipients.

The directory provides a wide range of choices, but note that some paid tax return preparers who would normally be listed in the directory have opted not to be included.

You also can find tax pro selection tips in my post Picking the perfect tax pro for your filing (and more) needs. My post 5 things to check when hiring a tax preparer looks at what you should examine when considering hiring a tax professional.

Tax felon friday_smallerTax Felon Friday: As evidenced by this case, and others cited in the weekly Tax Felon Friday feature, hiring a tax pro is not a job to be taken lightly.

The good news is that this case is not the norm. Most tax return preparers provide outstanding and professional tax service. Make sure you hire one of them.

You can read more about the wrong kind of tax pros, and/or catch up on all sorts of tax miscreants at the ol' blogs' special Tax Felon Friday page.

If you want more tax crime posts, notably those that were published long before I gave them a special end-of-week feature, you can peruse the, what else, tax crimes category. You'll find this post at the top of that collection right now, so just scroll down for more.

You also might find these items of interest:

 

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