Return Preparer Representation

Intentionally or unintentionally assisting a taxpayer to commit tax fraud or evasion can get a tax return preparer into very serious criminal and civil trouble. Severe penalties face tax preparers convicted of tax fraud, tax evasion, or violation of any of the Internal Revenue Service’s ethical standards for tax practitioners. These penalties are imposed not only on CPAs – they apply to any person who gets paid for preparing tax returns for others.

If you are a tax preparer under criminal investigation, representation by a seasoned return preparer attorney at Moskowitz, LLP is key to helping you establish a proper defense.

Tax preparer fraud and other violations

In addition to IRC Circular 230, which includes rules governing professional practice before the IRS, a number of statutes in the Internal Revenue Code (U.S. Code Title 26) regulate tax preparer conduct, including:

  • Making an unreasonable understatement of tax liability on a client’s return (6694)
  • Failing to prepare tax returns accurately and with the proper formalities (§6695)
  • Promoting abusive tax shelters (§6700)
  • Aiding and abetting taxpayers to understate their tax liability or otherwise prepare a false return (§6701, 7206)
  • Using taxpayers’ return information for other purposes (§6713, §7216)

Circular 230 gives the Secretary of the Treasury authority to censure, suspend, disbar, and/or impose sanctions on any tax practitioner who has prepared and signed a fraudulent return with the intent to violate the law. Penalties can reach up to three years’ imprisonment, permanent loss of your tax preparer’s license, and/or the closing of your tax firm.

The financial cost to the government is for the most part irrelevant – these crimes are based on the falsification and deception, not the defeat of the tax.

Effective tax return preparer representation

We routinely assist tax preparers who have willfully or unknowingly assisted taxpayers in defrauding the IRS. For many, we have managed to secure immunity agreements from the government regarding their testimony and waivers from their clients regarding otherwise privileged information.

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