A federal court in South Florida has permanently banned a tax preparer from the Miami area from continuing his practice and ordered him to repay $571,739.47, earned through fraudulent tax filings.
This decision was announced by the U.S. Department of Justice following a federal judge's order issued on October 26.
The tax preparer, identified as A. S.-H., is now prohibited from preparing tax returns for others, advising on tax preparation, working in related businesses, or earning income through investments or services connected to tax preparation.
Authorities revealed that the individual used other preparers' tax identification numbers (PTIN) to file federal tax returns, effectively concealing his identity as the responsible party for the documents.
The court also found that he included fraudulent deductions and tax credits to unlawfully lower the taxes owed by his clients.
Widespread Tax Filing Irregularities
Among the fraudulent activities were claims for unreimbursed employee expenses, tax credits for fuel and residential clean energy, as well as deductions related to health savings accounts.
One significant discovery was that 59% of the prepared tax returns contained requests for unreimbursed employee expenses, a remarkably high rate compared to the national average for such tax concepts.
Based on the evidence and the income generated by his business, the court calculated that the preparer must return $571,739.47 to the federal government as illicit gains.
This amount represents a civil measure for the return of undue benefits, not a criminal fine or direct compensation to affected taxpayers.
How to Protect Yourself When Choosing a Tax Preparer
The Internal Revenue Service (IRS) advises ensuring that a tax preparer has a valid PTIN, signs the tax return, and provides a copy to the client.
They also recommend being wary of those promising exaggerated refunds, including unsupported deductions, or refusing to identify themselves as the responsible party for the tax return.
Taxpayers can verify certain professionals' credentials using the IRS's free directory.
The agency warns that taxpayers remain legally responsible for the information submitted on their tax returns, even if they paid someone else to prepare it.
Those suspecting their preparer of including false information can file a complaint with the IRS.
FAQs on Tax Preparer Misconduct and Protection
What are the consequences for tax preparers engaging in fraudulent activities?
Tax preparers found guilty of fraud can face permanent bans, financial restitution orders, and potential criminal charges.
How can taxpayers verify a tax preparer's credentials?
Taxpayers can verify a preparer's credentials using the IRS's free directory to ensure they have a valid PTIN and proper qualifications.
What should you do if you suspect your tax preparer of fraud?
If you suspect fraudulent activity by your tax preparer, you can file a complaint with the IRS to investigate the issue.