According to a Department of Justice press release, the owner of a tax preparation company was held in contempt of a court order to cease preparing tax returns after the government demonstrated that the defendant’s company routinely engaged in fraudulent preparation activity. The defendant’s reluctance to follow the court’s orders, in this case, is an example of when seeking the counsel of an experienced tax attorney could be beneficial to achieving your business goals in the face of an IRS prosecution.
Note: From my experience, if the IRS preparer is a bad actor – a consent injunction is far better than a criminal tax prosecution. It would be insanity in my opinion to temp fate by violating a consent injunction when a bullet was dodged in securing one.
Court documents indicate that Jasen and Catharine Harvey owned Harveys Tax Service and served Florida taxpayers and their tax preparation needs. In a complaint filed by the IRS in January of this year, the government alleged and produced evidence to show that the Harveys tax business was responsible for the filing of at least 92 fraudulent tax returns on behalf of clients. Prosecutors argued that the Harveys claimed false prior income tax withholdings and fabricated fake Forms 1099-MISC.
After hearing arguments from the government and the taxpayer, the court issued a preliminary injunction, followed by a permanent ban on the couple’s tax filing operation, requiring that they stop the filing of tax returns for others immediately. Last week, the court found that Jasen Harvey and Harveys Tax Service violated the injunction and ban issued by the court. Jasen Harvey will be sentenced for his willful contempt of the court’s order in July. He faces jail time and monetary sanctions.
This story demonstrates the need to be represented by experienced tax counsel throughout the duration of your interactions with the government. Whether you have just been notified that your tax return has been selected for examination or you are in the middle of a criminal tax investigation or due diligence audit, being represented by tax counsel has major benefits. Likewise, representing yourself or making decisions (such as defying a court order) could result in disastrous consequences.
An experienced tax attorney will work with you to develop a strategy that keeps your objectives top of mind. At the tax return examination level, it is helpful to have a tax attorney in the room to ensure that information is not given away that can be used against you later. If a taxpayer is facing a criminal tax investigation, an experienced tax lawyer will ensure that the actions of the government are legal and do not infringe on your Constitutionally-protected rights. In the event that a dispute moves into a courtroom, a tax attorney is best positioned to represent your best interests. Lastly, if a court issues an injunction or a ban (as was the case in the story above), your tax attorney will know how and when to appeal such a decision, if that is the taxpayer’s desire. Self-help in a complicated area such as tax law has the risk of doing more harm than good.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing a diverse group of taxpayers. From individuals to middle market businesses and beyond, our team of zealous advocates will assist in the development of a strategy to help you reach your specific goals and objectives. Whether you are under a tax examination or are in need of tax planning advice, contact the Tax Law Offices of David W. Klasing today, online or by phone at (800) 681-1295, for a reduced-rate consultation.
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In addition to our staffed main offices in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento.
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Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here.