MauledAgain

Recently, reader Morris directed my attention to a news story out of San Antonio, Texas that described the sentencing of a tax return preparer who pleaded guilty to one of 15 counts of aiding and assisting the filing of false tax returns. The other 14 counts were dropped as part of the plea deal. The preparer was sentenced to five years of probation and ordered to pay restitution of almost $137,000. The IRS estimated the preparer prepared between 1,000 and 1,500 returns each year and that the tax loss from her placing false items on customers’ returns caused the Treasury to lose, at a minimum, almost $1.4 million.

Reader Morris asked. “How did this tax preparer avoid prison?” The answer requires an understanding of how the plea bargain system works. There is a lot of subjectivity in the disposition of criminal cases, most of which don’t go to trial but are settled by plea deals. Prosecutors are willing to agree to let defendants get lighter sentences in exchange for avoiding the costs and risks of going to trial. Ultimately it is up to the judge to determine whether the plea deal should be accepted though almost all of them are. If a plea deal includes prison rather than probation, a defendant is more likely to reject it. The question of whether probation should be imposed rather than a prison term arises in all sorts of criminal cases, not just tax fraud situations. Probation is more likely to be part of a deal when the crime is considered a “white collar” crime rather than one of violence. I don’t know what sort of negotiations took place in working out the plea deal in the San Antonio case. So I cannot answer the specific question posed by reader Morris.

Reader Morris also offered a comment that reflected a fact noted in the news story. He offered, “I would avoid a tax preparer who works out of a adult bookstore.” His comment was inspired by the fact that in 2019 the preparer operated the business in an adult bookstore. The preparer had been in a different location from 2017 to 2019 and later moved from the adult bookstore to another location. Who knows why the preparer rented space in an adult bookstore? Was it the only available and affordable location? Was it an attempt to expand clientele? Was it part of a marketing arrangement with the adult book store? How many people would be comfortable going into an adult bookstore to have their tax returns prepared? My guess is that most people would agree with the comment from reader Morris. Imagine being seen going into an adult bookstore by a spouse, family member, relative, or some other person whose reaction would not be ideal, and then claiming, “Oh, I went in to get my tax return prepared.” How believable is that? But since it can be proven to be true by those who did have their tax returns prepared at the store, perhaps the store owner decided to created an easy-to-prove excuse for regular customers. The details of the arrangement between the store and the preparer are unknown.

So would you go into an adult bookstore to have your tax returns prepared? I don’t face that question because I prepare my own returns, but if I did need a preparer I would not be looking for one in an adult bookstore, or a casino, or a grocery store, or an auto repair shop, to name a few places where I would not search.