Ignorance is Not Bliss

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A lot of bad things can happen when you are unaware. For instance, you may not know that there is a leaky water pipe in your kitchen ceiling. While on vacation, the pipe bursts and you return to a flooded house needing thousands of dollars in repair. You might be unaware that your auto mechanic took a phone call while completing an oil change in your car and he forgot to actually add in the oil. Unfortunately, you discover the mistake after the engine is ruined. You also might entrust your accountant with your personal information and income records, but unbeknownst to you, she filed for false deductions on your behalf and padded her wallet with some of your refund check. The Topeka Capital -Journal reports on a Jackson, Missouri tax preparer that actually did that and victimized 36 people by filing false tax returns in their names.

According to the article, the female tax preparer submitted approximately 98 false tax returns under the names of some of her clients for the tax years 2007 through 2010. The story reports that her clients were unaware that their tax preparer was fabricating their returns with false deductions for business losses, charitable contributions, unreimbursed business expenses, medical expenses and false tax credits, including education and residential energy credits. (A little here, a little there – the government will never notice.)

The woman reportedly electronically filed the returns and provided her clients with separate tax returns from the ones that were filed with the IRS. A portion of each tax refund from the fraudulent submissions was directed into her own personal checking account. The estimated amount of tax loss was more than $316,000.

The woman faces up to three years in jail and a fine up to $100,000 on each of five counts for filing a false tax return plus another five years and a fine up to $250,000 for identity theft. (That’s a possibility of eight years in jail and $750,000 in fines.)

Sometimes, not knowing about something is more comfortable than knowing it. However, in this case, ignorance was not bliss for the 36 victims. It’s important to get personal references for businesses that handle your personal information, so that you can avoid being a victim.

Source: Today’s ”Fraud of the Day” is based on an article in The Topeka Capital Journal titled, ”Missouri Tax Preparer Pleads Guilty to Tax Fraud Charges,” published on September 16, 2013.

A Missouri tax preparer has pleaded guilty to preparing false income tax returns resulting in a total tax loss of more than $316,000, U.S. Attorney Barry Grissom said Monday.

Cynthia M. Raymond, of Jackson, Mo., pleaded guilty to five counts of filing false tax returns and one count of aggravated identity theft. In her plea, she said she submitted about 98 false tax returns under the names of 36 clients for the tax years 2007 through 2010.

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.