Texas Tax Preparers Face IRS Scrutiny and Criminal Prosecution

Discussions of tax evasion often focus on individual and corporate taxpayers. Perhaps this is because people and corporations responsible for paying taxes have direct incentives to misrepresent their income or otherwise provide inaccurate information on their tax returns.

When investigating tax evasion, however, the Internal Revenue Service does not limit its inquiries to those who are responsible for paying taxes. Since 1996, the IRS Criminal Investigation Return Preparer Program has investigated and prosecuted tax preparers suspected of breaking tax-preparation laws and regulations.

Tax-return preparers may find themselves under IRS scrutiny for a variety of reasons. For example, if a return preparer has repeatedly claimed false deductions, inflated business expenses or taken other steps to reduce a taxpayer's taxable income, the tax preparer may be investigated.

In one such case from 2009, a Texas man was sentenced to 10 years in federal prison for "conspiracy to aid and assist in the preparation and presentation of false and fraudulent income tax returns." In a related case, a tax preparer was required to pay hundreds of thousands of dollars in restitution and spend more than eight years in prison.

In another Texas case, a man was sentenced to 51 months in prison for preparing fraudulent tax returns. At trial, prosecutors argued that he had claimed false itemized deductions and fictitious earned income credits.

Texas is not the only state where these matters are under investigation. But, many tax-return preparers in Houston and Corpus Christi have noticed vigorous enforcement efforts.

If you are under investigation or have been charged with a crime related to false preparation or false presentation of tax returns, speak with an experienced criminal defense attorney who can help you determine the most effective course of action.