MauledAgain

I have written so many times about tax return preparers who disregard the law that I refrain from commenting every time a tax return preparer is accused of, convicted of, or sentenced for tax fraud. Examples of my commentaries include posts such as Tax Fraud Is Not Sacred, More Tax Return Preparation Gone Bad, Another Tax Return Preparation Enterprise Gone Bad, Are They Turning Up the Heat on Tax Return Preparers?, Surely There Is More to This Tax Fraud Indictment, Need a Tax Return Preparer? Don’t Use a Current IRS Employee, Is This How Tax Return Preparation Fraud Can Proliferate?, When Tax Return Preparers Go Bad, Their Customers Can Pay the Price, Tax Return Preparer Fails to Evade the IRS, Fraudulent Tax Return Preparation for Clients and the Preparer, Prison for Tax Return Preparer Who Does Almost Everything Wrong, Tax Return Preparation Indictment: From 44 To Three, When Fraudulent Tax Return Filing Is Part of A Bigger Fraudulent Scheme, Preparers Preparing Fraudulent Returns Need Prepare Not Only for Fines and Prison But Also Injunctions, Sins of the Tax Return Preparer Father Passed on to the Tax Return Preparer Son, Tax Return Preparer Fraud Extends Beyond Tax Returns, When A Tax Return Preparer’s Bad Behavior Extends Beyond Fraud, More Thoughts About Avoiding Tax Return Preparers Gone Bad, Another Tax Return Preparer Fraudulent Loan Application Indictment, Yet Another Way Tax Return Preparers Can Harm Their Clients (and Employees), When Unscrupulous Tax Return Preparers Make It Easy for theblo IRS and DOJ to Find Them, Tax Return Preparers Putting Red Flags on Clients’ Returns, When Language Describing the Impact of Tax Fraud Matters, Injunctions Against Fraudulent Tax Return Preparers Help, But Taxpayers Still Need to Be Vigilant, Will the Re-Introduced Legislation Permitting Tax Return Preparer Regulation Be Enacted, and If So, Would It Make a Difference?, Can Fraudulent Tax Return Preparation Become An Addiction?, Tax Return Preparers Who Fail to File Their Own Returns Beg For IRS Attention, Using a Tax Return Preparer? Take Steps to Verify What Is Filed on Your Behalf, When Dishonest Tax Return Preparers Are Married, There Was Nothing Magical About This Tax Return Preparation Business, Don’t Get Burned By a Tax Return Preparer, Tax Fraud School: When It’s Not Enough to Be a Fraudulent Tax Return Preparer, It’s Not Just Tax Return Preparers Assisting in the Preparation of Fraudulent Tax Returns, Overused Fraudulent Tax Return Preparation Ploys, It’s Not Just Law Enforcement That Confronts Misbehaving Tax Return Preparers, When An Injunction Doesn’t Stop a Tax Return Preparer from Filing False Returns, Filing a Fraudulent Tax Return Is Bad, Filing More Than 3,000 Is Outrageously Bad, When It Comes to Fraudulent Tax Returns, It's Not Always the Preparers, A Procedural Twist on Dealing with Fraudulent Tax Return Preparers, Can Tax Return Preparers Learn from the Misdeeds of Other Preparers?, Should Tax Return Preparers Use Their Full Legal Names?, Is There Ever a Free Lunch, Even in the Tax Return Preparation Business?, Is the Tax Return Preparer or the Client Responsible For Unjustified Deductions?, When Preparing False Tax Returns Seems to Lack a Financial Motive, Was This Convicted Tax Return Preparer Courageous or Foolish?, One-Stop Shopping for Tax Return Preparation and Unrelated Merchandise?, and How Much Prison Time Should Be Imposed on a Tax Return Preparer Convicted of Preparing and Filing Fraudulent Returns?

Yet sometimes the preparation of fraudulent tax returns involves a twist that is somewhat different. According to this Department of Justice press release, a former IRS employee took things several steps further. This individual had been employed as an IRS contact representative from 1998 to 2009. She prepared and filed income tax returns for other people between July 2020 and April 2023. She did not list herself as the tax return preparer, making the returns appear as though these taxpayers prepared the returns on their own. She listed ineligible depends on the returns, generating higher refund amounts. She did not inform these taxpayers that she was doing this. Worse, she filed forms with the IRS directing portions of these excess refunds be deposited into her personal bank accounts. She used these funds for her own personal benefit.

She didn't stop there. Between April and October of 2020, she applied by telephone for Social Security retirement and spouse and widow benefits with the Social Security Administration. But she didn't apply for herself. She applied on behalf of other individuals who had no knowledge that she was doing this. She directed the Social Security Administration to send the benefits to her personal bank accounts. She used these funds for her own personal benefit.

Eventually, she was identified and charged. She pled guilty to four counts of aiding and assisting in the preparation and filing of a false tax return and one count of theft of government money.

According to this follow-up Department of Justice news release, which is what caught my attention, a few days ago she was sentenced to 18 months in prison, followed by three years of supervised release.

According to the first press release, "the charge of aiding and assisting the preparation and filing of a false tax return provides for a sentence of up to three years in prison, one year of supervised release and a fine of up to $250,000. The charge of theft of government money provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000." There is no mention in the sentencing of any fines. She could have faced as much as 13 years in prison, four years of supervised release, and $500,000 in fines. Nor is there any mention of restitution, that is, the Social Security Administration recovering the amounts paid to her.

And this makes a mess for the individuals for whom she prepared returns and in whose names she acquired social security benefits. The taxpayers for whom she prepared returns face the aggravation of figuring out how much of their refund that they should have received went to the preparer, and how what she did affects their accounts with the IRS. The individuals in whose name she acquired social security benefits face the aggravation of clearing their accounts so that when they become eligible and do apply for benefits the computations are distorted by what this person did.

The damage done by people who behave fraudulently, whether with taxes, social security, false texts from police departments or the Pennsylvania Turnpike Commission, online sales scams, phone calls designed to extract social security, Medicare, bank account, and credit card numbers, and whatever else goes in this list, reaches wide and deep. It is unfortunate that not enough is being done to identify and deal with these scammers and to prevent additional instances. They are far more of a threat than some of the people currently getting attention.