Tax preparer fraud

[ILLMAS]

From Accountingtoday:

http://www.accountingtoday.com/news/Married-Tax-Preparers-Sentenced-Prison-67936-1.html

[Guest Taxed]

Evidence also showed that the Youngs lied to their clients, telling them that the refund claims were based on tax loopholes unknown to the general public. They also bolstered their credentials, falsely claiming over 86 years of combined experience and assuring their clients that a federal judge had approved the filing method.

I don't know what type of clients these people had but to any reasonable person those words should have been a red flag.

[ILLMAS]

What I found more shocking was the preparers were preparing fraudulent 1099's, and you are right of any reasonable person , but when it comes to money who's reasonable.

[rfassett]

I don't know what type of clients these people had but to any reasonable person those words should have been a red flag.

There are a great, great number of gullible people looking for that pie in the sky windfall. I dealt with one this past tax season. An older gentleman whom I thought would know better was scammed by one of these get rich bogus lottery deals. He had sent them upwards of $100,000 before he brought it to my attention and I stepped in and put a stop to it. His sob story - "they promised me money that my son needed for a brain operation". There will always be someone at the intersection of where need meets greed that is going to be sucked in - hook line and sinker. And it will not always be the dullest tool in the shed.

As to these preparers, hang 'em and burn 'em. They need to be made an example.

[Guest Taxed]

Tell me about pie in the sky?

My insurance agent keeps on mailing me these sales illustration showing how much more I could be making with my investments if I became a more agressive investor. I am the conservative type, still have roughly 1/3 of my portfolio in fixed investments.

[ILLMAS]

A former client of mine called me about two year, to see why his co-workers were getting huge refunds and they made the same, and how come he was getting so little back. I calmly told him, please bring a copy of their tax return to compare them and I will tell you the reason, not happy he asked his workers why they were getting large refunds, and they invited him to visit the Tax Lady (I am not kidding on the name of the business), after he visits the tax preparing couple, he calls me to ask if he should do it. What they were doing was inflating unreimbursed employee expenses and pretty much cooking the books on Sch A, I told my former client, don't do it, one I won't be able to help if you get caught, secondly you could go to jail etc.... Anyway, last year out of the blue, he called me to thank me for discouraging him going through the amendment of his tax return, everyone at his work was caught, were summoned to appear in court and what have you not and they were in deep doodoo. And guess what, the Tax Lady didn't exist because they never signed the amended tax returns.

[Guest Taxed]

We had a preparer in our area who actually advertised, Bring me your return and I will find you a better refund. This guy really gave the rest of us nightmares because some of our clients were going there to get a second review.

Then one year we see his office at the strip mall, available for rent. No one knows what happened to him. The talk on the street is that he keeps on moving. Not staying at a location for more than 3-5 years.

[kcjenkins]

I found it hilarious that they were both 49, and claimed 86 yrs of combined experience! Meaning they each started tax work at age 6 !!!

I'm glad they are going to prison, altho I do expect most of their 'victims' were also guilty of knowingly cheating, given the size of the amounts involved.

[MsTabbyKats]

A former client of mine called me about two year, to see why his co-workers were getting huge refunds and they made the same, and how come he was getting so little back. I calmly told him, please bring a copy of their tax return to compare them and I will tell you the reason, not happy he asked his workers why they were getting large refunds, and they invited him to visit the Tax Lady (I am not kidding on the name of the business), after he visits the tax preparing couple, he calls me to ask if he should do it. What they were doing was inflating unreimbursed employee expenses and pretty much cooking the books on Sch A, I told my former client, don't do it, one I won't be able to help if you get caught, secondly you could go to jail etc.... Anyway, last year out of the blue, he called me to thank me for discouraging him going through the amendment of his tax return, everyone at his work was caught, were summoned to appear in court and what have you not and they were in deep doodoo. And guess what, the Tax Lady didn't exist because they never signed the amended tax returns.

I had a client I'll call M. I did her return for a few years and she was getting EIC. She got a raise. No more EIC...so, as you guessed, she wasn't happy and took her papers back.

Two years later she called me....needed my help. She went to "the man" to do her return and now she was getting audited. But, she couldn't locate "the man".

The woman is a nurses aide...and here's what "the man" did:

Schedule A....$10,000 for use of her car (she doesn't even drive)

Capital Loss.....$3000 loss...on the 1040, page 1....but no Schedule D (she had no investments)....done to lower the income so she could claim EIC

Her original return was e-filed...and when I was amending I asked the rep "what about the original preparer"...because his name and I assume real # was on the return. The rep said probably nothing would be done (this was just talking to him....nothing official).

[Guest Taxed]

>>>> .because his name and I assume real # was on the return.

Do you know that someone else could be using your PTIN on tax returns prepared by them and you would not even know unless there was an audit that involved fraud? Scary.