What Happens to Dishonest Income Tax Return Preparers?

Return preparers are an important part of the U.S. tax system. According to the Internal Revenue Service, about 60 percent of taxpayers use tax professionals to prepare their returns. While the vast majority of tax professionals provide honest, high-quality service, there are also dishonest tax preparers out there, so taxpayers should use care in selecting one. It is a federal crime to willfully prepare a fraudulent income tax return.

IRS-Criminal Investigation (IRS-CI), the law enforcement arm of the Internal Revenue Service, is responsible for investigating unscrupulous tax return preparers. In addition to monetary penalties, tax return preparers can face prison time for defrauding the government and their clients. IRS-CI’s New York Field Office investigates tax return preparer fraud in Long Island and in New York City.

Here are several recent examples of criminal investigations of tax return preparers in the metropolitan area. According to court documents:

 Errol Campbell owned and operated Campbell Accounting & Bookkeeping,located in Brooklyn, New York. He was indicted on 19 counts of aiding and assisting the preparation of false income tax returns. Campbell prepared tax returns that included false deductions for charitable contributions and employment expenses that lowered his clients’ taxable incomes and increased their refunds. He was sentenced to 24 months in prison.

 Guy Jenkins prepared tax returns in New York, New York. He was indicted on 20 counts of aiding and assisting the preparation of false tax returns. Jenkins prepared returns that contained false state and local tax withholdings, false deductions for charitable gifts, unreimbursed employee business expenses, and false business income or losses, earned income tax credits and education credits and expenses. He received 6 months of community confinement and was ordered to pay restitution of $450,000.

 Max Wilson Marcelin owned and operated Maxx Tax Services in Brooklyn, New York. Marcelin prepared returns that contained false itemized deductions such as false unreimbursed employee expenses. He was sentenced to 5 months in prison and ordered to pay restitution of $237,097.

 Hemraj Narine owned and operated Innovative Tax & Accounting Service, Inc., a tax preparation business in Richmond Hill, New York. Narine prepared returns that contained inflated or wholly fictitious deductions for gifts to charity, unreimbursed employee expenses, and other expenses. He received 6 months of home confinement and was ordered to pay restitution of $145,994.

"Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected," said IRS Commissioner John Koskinen.

Remember: Taxpayers are legally responsible for what is on their tax return, even if it is prepared by someone else.

Read about return preparer fraud and other tax scams on irs.gov

https://www.irs.gov/uac/Newsroom/Return-Preparer-Fraud-Is-on-the-IRS-Annual-Dirty-Dozen-List-of-Tax-Scams-to-Avoid-During-the-2016-Filing-Season