With another tax season swiftly advancing, the IRS recently reminded taxpayers to watch out for “ghost” return preparers. In a similar announcement last year, the IRS defined ghost preparers as “unethical tax return preparers,” whose methods commonly include claiming fake deductions, misreporting income, stealing clients’ refunds, or lying about their professional credentials. In a recent example, Upper Marlboro resident DiAnte Eugene Yawn, 41, who was not a registered tax preparer, was sentenced to five years in prison after filing false returns for “numerous” Maryland taxpayers, according to a press release issued by the Maryland Office of the Attorney General (OAG).
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Unregistered Tax Preparer Sentenced to Prison After Filing False State Returns
Despite his status as an unregistered or “ghost” tax preparer, Yawn filed large numbers of falsified tax returns during the period from 2014 to 2016, charging customers fees for his service. According to the OAG’s press release, “Many of the Maryland tax returns that] Yawn filed… included false information,” which he provided for the purpose of (1) inflating his clients’ tax refunds, and (2) artificially lowering their state tax liabilities.
Together, the inflated tax refunds cost the state of Maryland approximately $100,000, leading to a charge of theft above $100,000, to which Yawn pleaded guilty in November. This detail is notable because it demonstrates that, even if a return preparer avoids federal tax charges (such as aiding or assisting a false return, i.e. return preparer fraud, 26 U.S. Code § 7206(2)), professional misconduct can still lead to other criminal charges – in this instance, theft greater than $100,000.
Yawn included several false items on clients’ returns in order to inflate their refunds or lower their tax liabilities. According to the OAG, Yawn falsified information about his clients’:
- Business income and business losses
- Dental expenses
- Education expenses
- Medical expenses
Appearing before Judge Laura S. Ripken, Yawn was ordered to pay restitution and sentenced to five years in prison, though most of his sentence was suspended. The remaining six-month portion of the sentence is to be followed by three additional years of supervised release, during which Yawn is prohibited from acting as a tax preparer.
How to Avoid Being Scammed by a “Ghost” Return Preparer this Tax Season
Hiring a professional tax preparer is a smart move, especially after the rollout of new tax legislation like the Tax Cuts and Jobs Act (TCJA), which took effect in 2018. However, it is critically important to choose your tax preparer wisely, since you can be held liable for a tax preparer’s mistakes.
The IRS offers plenty of tips for choosing a tax preparer. Its advice, which you can read more of here, includes:
- Checking the tax preparer’s credentials and qualifications. The most reliable place to check this information is the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications, which displays tax lawyers, certified public accountants, and other types of tax professionals. David W. Klasing is actively listed as a tax attorney and CPA.
- Checking the tax preparer’s history. The IRS recommends checking the tax preparer’s standing with the Better Business Bureau (BBB), which is one of the top resources for consumers. The Tax Law Office of David W. Klasing has a perfect A+ rating from the BBB, earning five out of five stars and receiving a positive review. We have also received numerous client testimonials.
- Checking the tax preparer’s availability. On the IRS’ rigid calendar, hours or even minutes can have huge financial ramifications. In addition to offering 24/7 availability via phone or Skype, our California tax firm maintains offices in more than a dozen strategic locations, enabling us to provide efficient service to taxpayers statewide. We are also multilingual, ensuring clear and precise communication when dealing with complex international tax matters.
Need Help Filing Your State or Federal Tax Return? Contact Our IRS + California Tax Preparation Service
At the Tax Law Office of David W. Klasing, we have distinguished ourselves as trusted tax attorneys over years of superior service. Working with individuals, LLCs, partnerships, S and C corporations, sole proprietors, non-profit organizations, tech startups, trusts and estates, small businesses, online businesses, non-filers, and others, we are committed to client satisfaction. We can help you file state and/or federal income tax returns (personal and corporate); employment tax forms (such as Form 941); sales tax forms; and other crucial forms that you or your business is responsible for filing. Contact us online to request a reduced rate consultation or call the Tax Law Office of David W. Klasing at (800) 681-1295 for immediate assistance.
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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.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
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.
