- Days left
When consumers think about tax fraud, they typically think about the individuals who fail to report all their income or who take bad deductions. Many times the professional tax preparers themselves are forgotten, even though they can be willing participants in the fraud (and sometimes they're the masterminds!).

With this in mind, tax officials in New York launched a sting operation directed at dishonest tax preparers. They sent in undercover agents to pose as tax clients, and were shocked at the amount of tax fraud suggested (and carried out) by tax preparers. They went so far as to tell the "clients" that they were purposely not reporting some income, and they destroyed records related to taxable income.

In all, 85 tax preparers were approached by undercover agents, and 40% of them committed fraud. This infuriates me, because for every dollar in taxes that one taxpayer illegally avoids paying, that dollar must be collected from the other honest taxpayers. I've prepared plenty of tax returns in my professional career, and I can't imagine advising clients to cheat.

I've even assessed plenty of "gray areas" for clients and advised them to go the route that would cause them to owe more in taxes, because that's what I believed to be the most responsible and defensible position.

Professional tax preparers who aid clients in cheating on their income tax returns should be punished severely and barred from providing tax services in the future. There is simply no excuse for this behavior, and I hate that their actions reflect poorly on the rest of us who prepare taxes honestly.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

Advice for Recent College Grads

Prepare yourself for the "real world".

View Course »

TurboTax Articles

A Brief History of Income Taxes

Did you know President Abraham Lincoln, one of America's most beloved leaders, also instituted one of its least liked obligations - the income tax? In this brief history of taxes, see the historical events which shaped income taxes in the United States today.

How to Itemize Taxes When Claiming Dependents

Claiming dependents and itemizing deductions is an effective way to save money on your income taxes. Each dependent you claim allows you to reduce your taxable income by one exemption. Get a step-by-step overview on how to take advantage of itemizing your taxes when claiming dependents in this article on tax tips.

What Extra Tax Deductions Should I Make Sure To Take?

The federal government offers tax deductions and credits to reduce taxable income under certain circumstances. There are several that are often overlooked, including deductions for job hunting, caregiver expenses for dependents and children while you work, a credit to reduce taxes for moderate- to low-income earners and the premium tax credit associated with the Affordable Care Act. TurboTax can help determine if you qualify for these credits and deductions.

Know The Key Dates For Health Care Reform

"Open enrollment periods for the health insurance marketplace under the Affordable Care Act are limited" says Mac Schneider, a retired certified public accountant from Albion, Michigan. ?Avoiding tax penalties requires awareness of important dates that may vary year-to-year.? As well as key dates, there are time cycles and coverage gap allowances important to health insurance coverage under provisions of health care reform.

Add a Comment

*0 / 3000 Character Maximum