According to a Department of Justice press release, two Texas tax preparers were permanently ordered to cease filing tax returns for others. The IRS has, and continues to go after both taxpayers and tax preparers who attempt to game the system for their own benefit. This story is particularly timely with the likelihood that, post-COVID-19 social distancing measures, scammers will try to take advantage of taxpayers. Nonetheless, some planning opportunities in the wake of a global pandemic are not a scam. An experienced tax planning attorney can serve as a beneficial resource to those businesses most affected by the COVID-19 outbreak.
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According to court documentation, Smart Ajayi, operating under various tax preparation company names such as Smart Tax Services and Harplett Marketing LLC, and JoAnn Villarreal prepared tax returns for customers in exchange for a fee between 2016 and 2018. The IRS accused the pair of understating income and overinflating deductions of their clients in order to reduce the tax liability owed or even generate a fraudulent tax refund. The government estimates that the pair’s fraudulent preparation activities resulted in a substantial loss of tax revenue to the IRS.
Generally, this time of year sees a large number of fraudulent preparers searching for clients. In some instances, clients of fraudulent preparers are aware that something isn’t quite right but falsely believe that if their tax return gets audited and the IRS identifies any fraudulent activity, the tax preparer is responsible for the additional tax. That is simply not the case. Although a taxpayer may seek to recover penalties and interest associated with the inaccurate preparation from the tax preparer, the underlying tax is always the responsibility of the taxpayer. Moreover, if the IRS finds evidence that the taxpayer and the preparer conspired together to commit tax fraud, they can both go to jail.
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, KovelCPAs 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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When life returns to some sense of normality post-COVID-19, there will likely also be tax scams ranging from those that affect individuals to those that purport to benefit businesses. The postponement of the 2019 federal income tax filing and payment deadline will also add to some taxpayer’s confusion.
Needless to say, there will always be scams and traps for the unwary available for taxpayers to misstep into. If you are presented with a tax preparation or planning opportunity that appears too good to be true, it is worth doing a little extra digging. In offering our clients business and tax planning amid the COVID-19 outbreak, our tax professionals are available to review any proposed benefits or transactions that are purported to provide an extreme tax benefit.
Notwithstanding the potential for tax scams discussed above, there are various tax planning opportunities available to taxpayers as we move through this global pandemic. For instance, business valuations have fallen due to the recent economic downturn and may provide taxpayers wishing to transfer business interests a window to do so while recognizing less gain than they previously would have. Likewise, our team has its collective finger on the pulse of tax incentives that are in the pipeline that will be put in place to help business owners recover. As soon as we learn of a useful and timely opportunity, our clients will too.
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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Regardless of your particular business 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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