According to a Department of Justice press release, a Washington, D.C.-area tax preparer recently pleaded guilty to charges related to the aiding in the preparation of a false tax return. As tax season approaches, it is critically important for taxpayers and tax preparers alike to understand the tax consequences associated with the intentional preparation and filing of a false tax return. If you have questions or concerns about a complex tax issue or have been selected for an audit or criminal tax investigation by the IRS or state taxing authorities, you should consider contacting an experienced tax attorney as soon as possible.
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Court documents reveal that Renita Jenifer, a 52-year-old resident of District Heights, Maryland, was the owner and operator of RAJen Business Tax Service. The business serviced clients in the D.C. area. The business was in operation between 2013 and 2016, during which time Jenifer helped her clients file knowingly false tax returns by utilizing phony business expenses and itemized deductions that taxpayers were not entitled to. The effect of the inflated deductions was refunded for her clients that were not actually due.
The IRS Criminal Investigation team raided Jenifer’s office upon discovering her fraudulent activity. Additionally, the IRS revoked her Electronic Filing Identification Number. In response to the IRS discovering the illegal activity occurring at RAJen, Jenifer formed another tax preparation firm and began undertaking the same illegal inflation of tax deductions in an effort to secure her clients’ fraudulent refunds.
Investigators also discovered that Jenifer falsified her own individual tax returns by omitting income from her tax preparation business. Additionally, Jenifer failed to file a tax return in 2017 and 2018, altogether. The IRS estimates that Jenifer caused a tax loss to the government of more than $370,000.
Jenifer’s sentencing is scheduled for later this year. She faces up to three years in prison. Additionally, she will likely be sentenced to a term of supervised release upon her release from physical incarceration. Finally, Jenifer will likely be ordered to pay restitution to the IRS.
As a taxpayer, it is important to understand what a tax preparer is responsible for and what falls on your shoulders. If you sign a tax return, regardless of whether you prepare it, you are responsible for the accuracy of what is contained on the return. If the IRS or state taxing authority audits a taxpayer’s return and makes an adjustment, the taxpayer is responsible for the underlying tax. If a taxpayer provides knowingly false information to a tax preparer or knows that the tax return is false, they may be prosecuted for filing a knowingly false tax return.
Note: As long as a taxpayer that has willfully committed tax crimes self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax prosecution, the taxpayer can be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously receive a break on the civil penalties that would otherwise apply. It is imperative that you hire an experienced and reputable tax defense attorney to take you through the voluntary disclosure process. As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one-stop-shop to efficiently achieve the optimal and predictable results. See our Testimonials to see what our clients have to say about us!
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Tax preparers, on the other hand, can be charged with assisting with the preparation of a false tax return, as was the case with the tax preparer above. If a paid tax preparer knew or had reason to know that the information contained on the tax return was not true and accurate, but prepares and files the return anyway, criminal charges are on the table. From a damages perspective, paid tax preparers are not responsible for the underlying tax that is due on a false tax return, but can be held responsible to pay the underlying penalties and interest associated with their willfully illegal or negligent preparation.
Whether you are a taxpayer or a paid tax preparer, you should consult with an experienced tax attorney if you run into an issue that could result in controversy with the IRS or state taxing authorities. An experienced tax attorney who is also a licensed CPA is positioned to provide highly-technical advice aimed at mitigating criminal or civil liability.
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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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