To successfully prosecute a violation of the aiding or assisting provisions for aiding or assisting another to file a false form, the government must prove beyond a reasonable doubt that;
- The defendant aided, assisted, procured, counseled, or advised the preparation or presentation of a document
- The document was false as to a material matter
- The defendant acted willfully.
Charges under this provision are most often brought against, accountants, bookkeepers and others (including an entity’s employee’s) who prepare or assist in the preparation of tax returns. However, the statute is not limited solely to the direct preparation of a return but is much broader in that the statute reaches any intentional conduct that contributes to the presentation of a false document to the IRS. Case law in the area provides the following examples:
- an individual who sold discounted winning horse or dog race tickets to others for cash, thereby causing the filing of a false Form 1099s, as well as the individuals who signed government forms provided to the racetracks that falsely stated that he or she was the winner of the horse or dog race
- a person who knowingly prepared overstated appraisals to substantiate overstated deductions for charitable contributions
- persons who fabricate and then sell fictitious invoices to others to support nonexistent deductions
- a breeder who, in furtherance of a fraudulent tax shelter, signed back-dated contracts for the purchase of live stock
- an employee who prepared false books and records that were eventually used to prepare the entity’s returns
The be charged under these provisions one need only assist in the preparation of, and need not sign or file the actual false document. The statute has thus been applied to individuals who communicate false information to their return preparers, thereby causing the tax preparer to file a false return. On the other hand, the statute specifically provides that the taxpayer who signs and files the return or document need not know of, or consent to, the false statement for the aiding and abetting statue to be brought against the preparer. For example, a tax preparer who inflates deductions, understates income or claims false credits on a client’s return may be charged with aiding and abetting even if the taxpayer for whom the return is prepared is unaware of the falsity of the return he signed and filed. Moreover, a tax preparer who utilizes information provided by a client that the preparer knows to be false in the preparation of a returns can be criminally charged with assisting in the preparation of a false return.
FALSE AS TO MATERIAL MATTER
The courts that have ruled on the what constitutes a material matter have held materiality to be a matter of law to be decided by the court and not a factual issue to decided by the jury.
WILLFULNESS
To establish willfulness in the delivery or disclosure of a false document, the government need only show that the accused knew that the law required a truthful document to be submitted and that he or she intentionally violated the duty to be truthful. The crime of aiding or assisting in the preparation or presentation of a false return or document requires that the defendant’s actions be willful in that the defendant knew or believed that his or her actions were likely to lead to the filing of a false return. The Ninth Circuit (the appeals court for Southern California and thus controlling precedent) has held that the government must prove not only that the accused knew that the conduct would result in a false return, but must additionally establish that tax fraud was in fact the objective of the allegedly criminal conduct.
STATUTE OF LIMITATIONS
The statute of limitations for the crime of aiding or assisting the preparation or presentation of a false return or other document is six years. The statute of limitations for charges involving delivery or disclosure of a false document starts to run from the date the document is disclosed or submitted to the IRS.
