According to a Department of Justice press release, a Mississippi tax professional was recently sentenced to federal prison after being convicted of intentionally filing false tax returns for his and his clients’ benefit. This story illustrates the severe consequences taxpayers face when they intentionally take steps to deceive the Internal Revenue Service or state tax authorities. If you have failed to file a tax return or have taken a position on a tax return that could not be supported upon an IRS examination, it is in your best interest to contact an experienced tax defense attorney to determine the best way to resolve your tax noncompliance. Even intentional criminal tax evasion can be corrected without the risk of criminal tax prosecution if you are willing to knock on the government’s door before they come knocking at yours!
Court documents reveal that Alvin Mays owned and operated his own tax preparation business in Mississippi. Between 2012 and 2017, Mays prepared tax returns for clients and provided training to his staff to do the same. Government investigators uncovered that Mays wasn’t only training his employees to file returns, he was also teaching them to inflate deductions for business activities that did not exist and to claim refundable credits for which clients were not eligible. Government investigators estimate that Mays’ firm caused a loss of more than $900,000 in tax revenue to the IRS.
Mays was sentenced to serve 46 months in federal prison. Additionally, he agreed to pay $321,605 in restitution to the IRS, representing a portion of the tax loss that he and his firm caused. Finally, Mays was ordered to serve one year of supervised release upon the completion of his physical incarceration.
Unfortunately, tax preparers that are willing to cheat for their clients are in high demand and often will have new clients lined up around the block that desire to pay less taxes. It is important to realize that it is not just the tax preparer that has exposure for tax fraud. Is saving money on your federal and state tax bill worth risking a jail sentence and the associated life altering consequences of criminal tax conviction?
Throughout our series of blogs highlighting taxpayers who have over-inflated deductions or have failed to report income, claimed credits for which they were not entitled, we have highlighted the importance of being able to support your items of income, deduction and credits under audit or worse yet, criminal tax investigation. In the story above, tax returns were prepared with completely fictitious facts that purported to give rise to deductions and refundable tax credits. It is incredibly easy for the IRS to pick up on these types of blatantly fraudulent items. For instance, the IRS may automatically examine the tax return of an elderly client who is claiming a refundable tax credit relating to attending an undergraduate college program.
Considering the ease of which the IRS can sniff out returns with potential tax fraud, it is important for taxpayers to ensure that their tax returns are above board. If you have claimed deductions for expenses that were not actually incurred, failed to report items of income, or have taken advantage of refundable tax credits to which you are not entitled, it is important that you contact an experienced tax defense attorney as soon as possible to determine the best method to get right with the government.
Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.
In addition to our main office 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. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.
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