According to a Department of Justice press release, a former tax preparer from Pennsylvania will serve two years in a federal prison for assisting taxpayers prepare and file knowingly false tax returns. As tax season approaches, it is important to understand the consequences of filing a knowingly false tax return yourself, as well as the filing of a false tax return by a paid preparer. Questions about audit risk and potential criminal tax charges resulting from fraudulent tax returns should be directed to an experienced criminal tax defense attorney.
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Preparer Used Fake Businesses Losses to Lower Tax Liability
Court documents reveal that Abdoulaye Coumbassa was the owner and operator of Abbi Tax Services and Accounting. Prosecutors argued that from 2012 to 2015, the defendant engaged in the preparation and filing of tax returns that were knowingly fraudulent. The defendant used a number of illegal strategies to reduce tax liability or generate refunds, including using fake business losses.
The IRS and Department of Justice estimated that the defendant’s illegal actions cost the U.S. more than $2.1 million in lost tax revenue. To make matters worse, many of his clients were unaware of the illegal tactics that the defendant employed to lower their tax burden or generate refunds. In addition to his prison sentence, Coumbassa was also ordered to serve one year of supervised release and pay nearly $250,000 in restitution to the IRS.
Tax Preparer Liability and Complex Tax Issues
The story above is an example of the consequences that can affect both taxpayers and their tax preparers. Many taxpayers are unaware that if a tax preparer engages in illegal activity in preparing a tax return, the taxpayer is generally still responsible for the underlying tax, as recomputed by the IRS. Though, the taxpayer can sue the preparer for any penalties and interest that arose due to their negligence or intentional fraudulent actions. If the taxpayer has knowledge that the return they are filing is false, especially where they conspired to understate tax liability with their preparer, they can face criminal charges along with the preparer.
The U.S. system of taxation has become to be known around the world as being extremely complex. There are simply some tax matters that should be discussed with an experienced tax attorney who has extensive experience advising on the tax treatment of complex issues and transactions.
Likewise, if you are under audit or criminal tax investigation by the IRS or state tax authority, it is in your best interest to contact an experienced criminal tax defense attorney as soon as possible. The sooner you are represented by counsel, the less time you will have to spend going up against the IRS alone and the greater the likelihood your audit or investigation will be solely about money and not about criminal tax exposure.
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Warning signs an audit has gone criminal
What is an eggshell tax audit?
What is an effective tax defense in an IRS eggshell tax audit?
So you cheated on your taxes and you are under a tax audit
Why should I hire a tax attorney to represent me in a tax audit?
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Contact an Experienced Tax Attorney Today
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.
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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Will it cost me more to hire the Tax Law Offices of David W. Klasing, whose 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.
