As we approach the end of the calendar year, many Americans will begin thinking about their tax filing obligations, the documentation that their tax preparer will need, and any additional tax that they may owe. Once tax returns are prepared, a smaller subset will find out that they are due a refund. Refund claims are typically the result of over-withholding or a year with more deductions than expected. But some taxpayers and their tax preparers claim refund when they are knowingly not appropriate. Such is the case in today’s blog, involving a pair of tax preparers that assisted in the claiming of over $1 million of fraudulent deductions. Without surprise, their illegal activity resulted in a federal prison sentence.
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According to a Department of Justice press release, Janell Lightner and co-defendant Stacey Anderson operated Anderson Professional Tax Services (APTS), a tax preparation firm that focused on tax return preparation in Texas, Washington, D.C., and Maryland.
Between 2013 and 2014, Lightner and Anderson worked together to secure fraudulent refunds on clients’ tax returns by claiming inflated deductions for knowingly false expenses. Furthermore, the pair claimed credits that their clients were not entitled to, such as educational tax credits. Through the investigatory process, the government estimates that as a result of Lightner and Anderson’s criminal actions, the IRS suffered a tax loss of more than $1.3 million and over $8 million, respectively.
At sentencing, presiding U.S. District Court Judge Alan D. Albright sentenced Lightner to serve 27 months in a federal prison. Additionally, Lightner was sentenced to serve three years of supervised release following the conclusion of her physical incarceration. Lastly, she was ordered to pay $1.337m in restitution to the IRS. Anderson was sentenced to serve 87 months in prison and pay over $8 million in restitution.
Unlike the story above would seem to indicate, most tax preparers are honest professionals who would not risk their or their clients’ livelihoods for a quick buck in extra tax refunds. But as we inch closer to tax season, the reality that this type of fraud exists should be in the minds of taxpayers.
Many tax compliance and planning concepts are complex and require a detailed analysis of the facts and circumstances surrounding a client’s situation. In those instances, consulting with an experienced tax attorney who is also a licensed CPA may be the best option to ensure that you are accounting for your particular situation correctly, as well as taking advantage of any tax planning opportunities that may be available.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have worked with individuals and business owners of companies ranging in size from mom and pop to middle market. If you have received notice from the IRS or state taxing authorities that your individual or business tax returns are being scrutinized, our team of zealous advocates will help you develop a legal strategy aimed at preserving the integrity of you and your business. Do not let the threat of a criminal investigation or prosecution keep you up at night. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.
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