False Tax Returns: Why CPAs and Their Clients Go to Prison

Learning Objectives

• To discuss the role of the IRS in investigating false tax returns.
• To explain the common statutes used for prosecuting false tax returns.
• To analyze how preparers of false tax returns are discovered.
• To inspect the common schemes by return preparers in preparing false tax returns.
• To discuss the common defenses used by return preparers in shifting blame.
• To identify the steps an investigation takes from its inception to a trial.
• To analyze how a federal judge evaluates the criminal sentencing of a bad return preparer.
• To explain the best practices for return preparers if a false tax return is suspected.
• To review case studies of return preparers that were sent to prison.

Course Description

It is a crime to knowingly prepare a false tax return.

Many return preparers are not aware of the severity of civil and criminal penalties for a false tax return. Not only can a CPA lose the ability to represent their client to the IRS, but the CPA can lose their CPA license and potentially go to prison. Every tax year, the IRS publishes various stories about how the return preparers and their clients go to prison for willfully submitting false tax returns.

This CPE course will discuss the ways that the IRS investigates bad return preparers.

You will also understand the difference between simple mistakes versus criminal acts. The course also helps return preparers know what to do if they are being investigated for a false tax return, including if their client is under criminal investigation.

Following are the major questions that are answered in this CE Tax Course:

• How does the IRS catch bad return preparers?
• The difference between simple mistakes and criminal acts?
• What to do if your client is being investigated for tax crimes?
• How to protect yourself if you are accused of preparing false tax returns?

Overview

• IRS mission statement

  6 mins
• How does IRS evaluate bad return preparers?

  20 mins
• Tools used by IRS-CI in investigating potential Criminal Violations

  32 mins
• Common criminal statutes

  47 mins
• Common schemes

  65 mins
• Courtroom process

  90 mins