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Log In / Register | May 25, 2018

Tougher IRS Oversight of Tax Preparers

The Internal Revenue Service is stepping up criminal investigations of tax preparers who file fraudulent returns. Testing of competency, continuing education and a higher standard of ethical conduct will be applied to tax preparers, as opposed to previously just attorneys and CPAs.

Tax return preparers who aid or assist in the preparation of fraudulent tax returns can face criminal sanctions (Code §7206(2)). Preparers who are found guilty can be incarcerated and made to pay restitution to the Treasury. For example, last month, a preparer in Buffalo, New York, who worked for H&R Block was convicted of preparing a number of fraudulent tax returns over a three-year period. Her criminal conduct (pdf) consisted of listing bogus businesses and false dependents on these returns. She was sentenced to six months of home detention and three years probation and ordered to pay restitution to the government in the amount of $41,492. The IRS lists a number of examples of abusive return preparer investigations for the government's fiscal year 2011.  [via New York Law Journal, $$ subscription required]

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