Fraudulent Tax Preparation, Ethics in Tax Accounting, and the Price Bogus Tax Preparers Should Pay
What’s the price one has to pay for filing false federal tax returns equivalent to $1 million? It should be a lesson for Frederick Jenkins and Willie Jenkins – the brothers who connived in fraudulently inflating tax refunds.
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The Jenkins brothers were charged of creating fabricated business income and losses to drive up tax refunds for their clients for tax years 2008 to 2011. US Attorney Sally Quillian Yates emphasized in her press release that tax preparers that are expected to uphold the veracity of the tax system. Accurate preparation of business returns must be prepared by every tax preparer. Anyone who will abuse the system for their own gain will be put under scrutiny by the Internal Revenue Service (IRS) and should be criminally prosecuted.
IRS has special agents who work discreetly to investigate and punish deceitful tax return preparers. Special Agent in Charge of IRS Criminal Investigation Veronica F. Hyman-Pillot said, “It is also important to note that even if someone else prepares someone’s return, the taxpayer is ultimately responsible for all the information on the tax return. Therefore, choose your tax preparer carefully.”
For this year, there had been a number of dishonest tax preparers who have been punished already. Amberula Levitt, owner of Tax Time Tax Service, also in Atlanta, was sentenced to one year and nine months imprisonment for committing tax scam. In this case, Levitt under-reported her earnings for her personal tax returns. Levitt was pleaded guilty on October 29, 2013 for two counts of filing false tax returns for tax years 2004 and 2005.
John Barrick, Brigham Young University Associate Professor of Accounting and a CPA and Tax Preparer, stated a meaningful lesson about tax preparation, “The tax law is large and complex. For these reasons, the majority of taxpayers seek the help of return providers. Regulation will not deter the most unscrupulous and unethical return providers. They are ghost preparers that attempt to defraud the income tax system. Nor will regulation increase return preparers’ ethics without enforcement. Regulation clearly creates winners and losers. Don’t allow states to regulate out-of-state tax return preparers. There are enough taxpayers that are required to file in multiple jurisdictions that it makes it difficult, if not impossible, for return preparers to provide the help they require. Rather than regulate, please take steps to protect taxpayers from unscrupulous and unethical taxpayers: encourage voluntary disclosure, eliminate refundable credits, enforce existing return preparer laws, and educate taxpayers. However, if you must regulate, exclude those who are already regulated, including attorneys, CPAs and enrolled agents. If you must regulate, in addition to knowledge you must make sure that ethics are in place. In training future CPAs, we always start with a foundation of ethics.”
About Interstate Tax Strategies, P.C
When it comes to Atlanta tax services, Interstate Tax Strategies, P.C. is unique in its exclusive focus on interstate sales and use tax. Ned Lenhart, CPA, is President of Interstate Tax Strategies and has been perfecting his tax consulting skills for over 27 years. Well-versed in sales tax audit procedures, he started Interstate Tax Strategies, P.C. in 2003 after serving as a Firm Director for Deloitte in its Atlanta office. Prior to joining Deloitte in 1994, Ned was a Sr. Manager with Arthur Andersen in Kansas City, Missouri. Ned also worked for the Missouri Department of Revenue where he was the Director of the Compliance Division and led the state's civil and criminal tax enforcement efforts. He also served as Deputy Director of the Division of Taxation and Bureau Manager for the Compliance Division.
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