Federal Criminal Charges Against Tax Preparers
Many people choose to go to professionals when it comes time to prepare their taxes. While it is natural to trust expert tax preparers, it also comes with a certain level of risk. Tax preparers that that use false information or fraudulent practices when filing clients’ taxes may find themselves at the center of a federal investigation.
Filing False Returns
Most tax preparers that are facing federal criminal charges are being investigated for filing false returns or assisting others with filing false returns. Proving that a tax preparer filed false tax returns can be difficult. To do this, federal prosecutors must prove that the individual knew that some of the statements in the tax returns in question were fraudulent.
A tax preparer that was working with multiple people might use the same type of information on each tax return. For example, if a preparer claimed an exact amount of money on multiple people’s returns, the government will have a better chance of prosecuting the tax preparer. If the information on the tax returns doesn’t make sense and appears fraudulent, it is more likely that the tax preparer will be prosecuted.
If You’re Investigated as a Tax Preparer
Most investigations into tax preparers are conducted by IRS agents from the Criminal Investigating Division.
When an investigation into a tax preparer begins, the government starts by interviewing any of the individual’s former clients. In some cases, tax preparers learn of the investigation into their business from their former clients. The investigation is conducted this way so that the government agents can learn the truth from the clients without the tax preparer’s knowledge. This will help the agents determine whether or not the tax returns were fraudulent.
If you find out that your clients have been speaking to federal agents, now is the time to retain a federal criminal attorney.
Additionally, the agents will use these interviews to determine if the false information was provided by the tax preparer of the client. As they learn more about how the preparer collects their clients’ information, they will be able to better understand who is at fault.
Federal agents often investigate tax prepares that get paid in questionable ways. Tax preparers that have significantly lower fees with a large volume of returns will set off red flags for federal agents. Similarly, tax preparers that ask for a portion of their clients’ refund will also look suspicious, as this is incentive to commit a crime.
Defenses to Criminal Charges Against Tax Preparers
The best defense to use if charged with tax fraud really depends on the specific situation. Tax preparers that are being investigated must contact an attorney as soon as possible.
Defenses to tax fraud:
- Intentional Conduct: This defense is applicable for tax preparers that did not intend to commit fraud.
- Insufficient Evidence: An attorney can use this defense if there is insufficient evidence that the tax prepare committed fraud.
- Statute of Limitations: For investigations involving fraud and tax evasion, there is a limited amount of time in which an individual can be prosecuted.
- Entrapment: This defense can be argued if the government compelled the tax preparer into committing a crime that they wouldn’t have committed otherwise.
- Mistake: This defense can be used if it is clear that the tax preparer made a mistake when filing their clients’ taxes. However, this isn’t easy to prove as the tax preparer is assumed to be a professional in their field.
- Insanity: Insanity may be used as a defense, though it will require you to plead guilty to committing tax fraud.
If you find that the IRS has targeted you in an investigation, it’s time to start building your case. Contact a federal criminal attorney today to make sure you’re properly prepared for the ongoing investigation.
Tax preparers are people who make a very profitable living filing other people’s tax returns. Also called preparing or cooking taxes; according to US law it is a federal crime. The preparer fraudulently changes details in people’s taxation forms to enable them file for higher tax refunds. This is called a grand felony as it combines the crime of counterfeiting with tax fraud, while lesser crimes may crop up in the investigation’s course; such as aiding and abetting a crime.
Federal charges against tax preparers are pressed for prosecution and indictment by the United States Inland Revenue Service’s aggressive Criminal Investigating Section. This is the federal body mandated with investigating, apprehending and prosecuting most taxation issues. A tax preparer is seen as more or less a big fish in the eyes of the IRS investigators; since a successful prosecution will take a whole lot of tax fraud off the streets. There are three categories that are of interest in these proceedings; the subject, the witness and the target.
The target is a person on whom the case is being built against, or proof is being sought to necessitate their prosecution. Investigators normally have probable cause to believe that the target is the main offender. A witness however; is any person that may have seen, heard or might have evidence that incriminates the target. A grand jury subpoena can be used to impress upon a witness the necessity of testifying against a target. The subject on the other hand is not targeted for prosecution; though federal investigators might suspect that one may have played a part in the conspiracy to commit crime.
Prosecuting a tax preparer is no mean feat. On the outset, the prosecution and Inland Revenue Service agents will be at pains to illustrate how the alleged preparer knew that the tax information they were filing was false. Most federal charges against tax preparers are usually weakened by the lack of concrete evidence; though availability of such evidence is bound to drastically change the weight of the prosecution’s case. Any and all information pointing to falsities made by a tax preparer is usually reason enough to press charges or make an indictment.
Evidence can be collected mainly from previous clients of the tax preparer and sometimes old customers will be the ones to tip off the defendant that they’re being investigating. Paper and money trails are very important when investigating federal charges against tax preparers. A number of prosecutorial strong points can be derived from any seized financial documents that indicate fees the tax preparer took from clients. The crucial angle of collusion with the rebate fraudster is thus proven; meaning a preparer machination to manipulate documents with the view of receiving big tax returns or generating higher fees took place.
Such evidence can be correlated by the federal agent’s endeavors to secure witness statements at the very onset of the investigation to circumvent witness tampering. In such a scenario, other stiffer penalties may be encountered. Common tactics that could land the defendant in more hot water include; making contact with other people in the subject, witness or target category to subjugate process. Covering up or trying to tamper with evidence; or the preparer trying to obstruct the course of justice in any way will attract additional charges. federal tax agent’s resources enable them to pinpoint where and when evidence was changed, altered or destroyed. Do not try any maneuvers that may endanger your current legal standing; don’t forget that federal charges against tax preparers have been filed in your disfavor and are being actively investigated.
Another thing to avoid is giving false information to federal agents and tax investigators because if you’re found out, which will be very likely; your category status could change! For instance if you divulge untruths and end up incriminate yourself; your status elevates from a subject, to a witness or even the subject. Therefore, it’s legally advisable to plead the Fifth Amendment in the face of pressure to answer questions. This guarantees you the constitutional right to keep quiet and let the investigation take its course; which can be translated as due to influence by legal counselor.
federal charges against tax preparers do not always lead to indictment, as a person can change the course of the proceedings. This is mainly dependent on the strength of the case; and the effectiveness of your legal representation. There are steps that a tax preparer under investigation can assist their lawyer to facilitate.
Legal counsel is of paramount importance when faced with federal charges against tax preparers. A criminal defense lawyer will make it easier to find information regarding your legal tussle with the IRS. The proven way to effectively get the investigating agent and the federal prosecutor to cooperate information with you is by initially engaging an attorney in your proceedings.