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IRS Fraud Cases (interesting Read)


Terry D EA

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There are times that we all wonder why we as taxpayers need to obtain some type of credentials. In the articles below, I didn't see any specific designations for the prepares who were caught by the IRS,  in the past I have seen CPA's and others guilty of some type of wrong doing. Some of these cases just amaze me. Do folks who are preparing returns actually think they could squeak these things by the IRS? To me, some of the expenses and other items come glaring right off of the article. Now for the client, do they really trust these people and do they know their return is being fraudulently prepared and what the consequences are? Personally. I couldn't begin to do these things. I worry about honest mistakes and question the death out of a suspicious client. How do these folks sleep at night.

https://www.accountingtoday.com/news/tax-season-begins-jan-29

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Wow, I am always surprised that I am surprised.  What an article.

And, oh my goodness, at the DIY stuff we all see.  Not to hijack your thread, Terry, but recently I was asked to amend a self-prepared return done by a taxpayer that bills by the 1/10th of an hour.  (And that's all I'll say about that.)  She wanted a dependent removed.

When I looked at the enormous return, she had a $38,000 loss on line 17 for five passive rentals, four of which had zero gross income.  She omitted AMT.   She had a sale of commercial property, and a 50,000 loss on a retail business.  I don't have a clue if anything on Sch C, 4797, Sch D is correct, but I know that the rental loss and missed AMT jumped off the page at me.  She owes IRS at least $46,000.

I told her I'd have to amend everything or nothing.  She was going to think about it, and surprise, she decided she could do it herself.  I doubt she does anything, but if she amends that thing to only take off the dependent, will IRS catch any of this?  Surely they will.  But I don't know.

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50 minutes ago, RitaB said:

Wow, I am always surprised that I am surprised.  What an article.

And, oh my goodness, at the DIY stuff we all see.  Not to hijack your thread, Terry, but recently I was asked to amend a self-prepared return done by a taxpayer that bills by the 1/10th of an hour.  (And that's all I'll say about that.)  She wanted a dependent removed.

When I looked at the enormous return, she had a $38,000 loss on line 17 for five passive rentals, four of which had zero gross income.  She omitted AMT.   She had a sale of commercial property, and a 50,000 loss on a retail business.  I don't have a clue if anything on Sch C, 4797, Sch D is correct, but I know that the rental loss and missed AMT jumped off the page at me.  She owes IRS at least $46,000.

I told her I'd have to amend everything or nothing.  She was going to think about it, and surprise, she decided she could do it herself.  I doubt she does anything, but if she amends that thing to only take off the dependent, will IRS catch any of this?  Surely they will.  But I don't know.

Jaw drop emoji

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Greed, on the parts of the preparers and taxpayers, is a powerful motivator.  Sadly, our society has devolved and continues to do so into a strong consumerist and 'me' centric environment.  It's sad to see the growth of me vs. us. 

There are times when I question clients about non-charitable deductions.  When they have to put the value on that bag of clothes, I ask them to consider whether the intent of the contribution was charity or simply a tax deduction.  Would the donation have been made without the tax benefit?  It will be interesting to see how contributions compare with the new tax law.

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49 minutes ago, NECPA in NEBRASKA said:

This kind of stuff amazes me. I don't know how people think that they can or should get by with this stuff. I would never be able to sleep if I had knowingly done anything like that.

Seriously.  If I left $13 in interest off my return, they'd put my in the cross bar motel.

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On ‎1‎/‎5‎/‎2018 at 12:09 PM, Terry D said:

 Now for the client, do they really trust these people and do they know their return is being fraudulently prepared and what the consequences are?

Tax payers go to those places because they know they are crooked. We had one in DC and now has moved to MD (because DC was about to get him). He opens 24 hours and appointments at 3AM are packed. All day he and his associates are VERY busy.  Everybody knows he has been in jail for preparing false tax returns for others. Now, he doesn't sign the returns and users paper file as if they prepared their own return.  So, don't believe for a second that the tax payers don't know what they are doing.

People have told me that they have been using their services for 10 years or more and as soon as I see their returns, I can see mistakes but the IRS "brilla por su ausencia".

 

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8 minutes ago, Pacun said:

Tax payers go to those places because they know they are crooked. We had one in DC and now has moved to MD (because DC was about to get him). He opens 24 hours and appointments at 3AM are packed. All day he and his associates are VERY busy.  Everybody knows he has been in jail for preparing false tax returns for others. Now, he doesn't sign the returns and users paper file as if they prepared their own return.  So, don't believe for a second that the tax payers don't know what they are doing.

People have told me that they have been using their services for 10 years or more and as soon as I see their returns, I can see mistakes but the IRS "brilla por su ausencia".

 

I always trust my psychic.

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