8 Shocking Tax Stories
Tax prep specialist want to do all they can to find their clients those big deductibles. But some of them may be trying too hard. In some instances, they may falsify tax documents to make it look like taxpayers have more or bigger deductibles than they do.
Although this can save clients during tax time, it’s likely that the IRS will catch on sooner or later. When this occurs, the taxpayer, and the tax prep agent, can get in trouble big time. Here are some examples of tax prep specialists who have led their clients astray.
Rosalynn Thomas operated Tax Pros in Temple, TX. She was charged with 11 counts of assisting in the preparation of false tax returns. She reportedly prepared taxes with false business income and education credits. She was busted when an undercover IRS agent decided to use her services.
Lenore Worthy of Temple Hills, Maryland found herself in a similar boat. She provided tax prep services under several business names including United Tax Services for tax years ranging from 2012 to 2018. She was accused of adding false deductions and business losses to the returns she prepared. She too was brought down when an undercover agent came to her door. Her actions resulted in a tax loss of $189,748.
Todd Lucas, CEO of i3 Brands, Inc. may not have been a tax prep expert, but he knew enough about the system to create his own type of scam. Although he had the legal duty to pay employment taxes to the IRS, he did not fully pay the withheld taxes owed. From 2008 to 2017, he failed to pay over $4.9 million in payroll taxes, penalties and interest. He faces a maximum penalty of five years in prison.
James Brassart of Bentonville did not seek the help of a tax expert. He was responsible for falsifying his own return. With a gross income of over a million dollars, he owed $486,438 to the IRS but did not pay any of the tax he owed. He went to great lengths to conceal his assets and has made false bankruptcy claims in the past to conceal his debt. Brassart was sentenced to three years in prison for income tax evasion.
Keysha Briseno and her spouse own and operate a tax preparation business under the name of Tax Genius LLC, Tax Genie and K&J Tax Service. The company prepared over 4200 return between 2017 and 2019, with more than 25% containing fabricated business losses. She was found guilty of similar charges in 2012 and had her license revoked but continued to prepare taxes under her sister’s license. She consented to an injunction that bars her from acting as a tax preparer under her name or any of her company names.
Toni Gale Engeling and Michael Andrew McCann are a team that got taken down for their illegal tax related behavior. McCann is a Brazoria dentist and Engeling is a bookkeeper and McCann’s sister. The team allegedly conspired to come up with a variety of methods to keep the IRS from assessing McCann’s income including using nominee entrees, comingling personal and business finances and outright lying to the IRS. Both have been charged with conspiring to defraud the government. McCann is also being charged with endeavoring to obstruct the IRS, failing to file tax returns and making false bankruptcy declarations. If convicted, McCann could end up spending fourteen years in prison while Engeling is facing a possible 15 year sentence.
Alicia Coarsey, owner of Tax Express of Tifton, LLC is being charged with preparing tax returns with fabricated medical expenses and charitable contributions. She has claimed false business losses, in some instances for non-existent businesses, to get her clients higher returns. She also understated her customer’s liabilities. In one instance, she claimed over $19,000 in medical expenses for a client who did not have significant medical expenses for that year. She is likely to have lost the United States over a million dollars.
Two Miami area tax return preparers are coming under fire for filing tax returns that understated their clients’ tax liabilities. According to the charges against Gerald Vito and James Eleby of Gerald Vito, LLC dba Income Tax Services, the team prepared over 1900 taxes in the 2018 and 2019 tax year that understated the amount their clients owed. It is likely they lost the United States a million dollars in revenue. They have also harmed their customers who may now be required to pay interest and penalty for the tax returns they prepared.
It is unclear whether these tax prep agents and businesspeople made errors due to a lack of knowledge of tax law or whether they purposely set out to defraud the government, but one thing is for sure, a comprehensive understanding of the law would have certainly been helpful.
Latino Tax Pro offers a variety of courses that will keep you on the top of tax laws. We offer classes and resources that cover bookkeeping, tax updates, federal law, ethics and more. We provide the community with the knowledge and professionalism they need to run an aboveboard company and attract clients.
Hiding income from the government may be tempting, but it’s just not worth it. Having a good grip on tax law and reporting all financial activity to the IRS will keep you from incurring penalties and out of jail. Good luck preparing your taxes responsibly!