Be Careful in the 2013 Tax Season…
A recent criminal conviction serves as a reminder that you must be careful when hiring a tax return preparer to prepare your 2013 tax return.
Verlean Hollins, a Chicago tax preparer plead guilty to aiding and assisting in the preparation of 3,200 false federal income tax returns. Hollins admitted that during the 2009 through 2011 tax season, she filed 3,193 income tax returns in which she falsely claimed the eligibility of higher education tax credits for her clients.
Both the IRS Criminal and Civil Investigation Division have been focused on closing the tax gap and protecting taxpayers. According to the US Attorney’s Office, Hollins’ fraud cost the government $3,372,000 in false refund claims. Stopping tax preparer fraud is one way the government can work toward closing the gap.
Preparation of a false federal income tax return carries a sentence of no more than three years in prison and a $250,000 fine or an alternate fine of the greater of twice the tax gain or twice the tax loss. Ms. Hollins will be sentenced on April 22, 2014. She faces a maximum sentence of six years in prison and a fine of approximately $800,000.
Unfortunately, taxpayers become aware of tax preparer misconduct after being contacted by the IRS for a tax audit. Return preparer misconduct can result in taxpayers owing significant back taxes as a result of incorrect deductions and tax credits.
Be wary of tax preparers that promote large tax refunds especially if the fees are based on a percentage of the taxes saved. If you are looking for an income tax return preparer, check the credentials and licensing status of the tax preparer. You can review online the return preparer’s licensure status through state boards of accountancy for CPAs and state bar associations for tax attorneys. A Google search can assist greatly in reviewing the history of a return preparer.
Importantly, you should review your 2013 tax return before you file it. If you have any questions pertaining to the return, then you want to contact the tax preparer to clarify any and all discrepancies. Remember, it is the taxpayer that is liable for what is reported on the tax return and not the preparer.
Should you have any questions or concerns regarding your tax preparer, please do not hesitate to contact the Law Offices of Todd S. Unger, Esq. LLC today (877) 544-4743.