James Edward Maule, MauledAgain (June 11, 2021): When Tax Return Preparers Are Not the Source of the Tax Fraud

James Edward Maule’s MauledAgain tax blog entry focuses on the prevalence of alternate causes of tax noncompliance other than tax return preparers. His article, “When Tax Return Preparers Are Not the Source of the Tax Fraud” includes the following commentary:

Though there are tax return preparers whose antics contribute to tax noncompliance and thus the tax gap, most do not behave in that manner and most tax noncompliance occurs beyond the reach of tax return preparers. Sometimes, even if a tax return preparer prepared the return, the fraud cannot be attributed to the preparer. An example of this sort of situation is presented in a recent Department of Justice news release. According to that news release, the owner of a physical therapy and acupuncture business, who also co-owned a similar business, with the help of co-conspirators reduced taxable income by shifting funds to other entities that they controlled and that they deducted as business expenses. They also took checks made payable to those businesses and cashed them at a check cashing business. Though the checks represented income to the business, the owner and the co-conspirators did not disclose theses receipts to their tax return preparers. That had the effect of causing their tax returns to be fraudulent.

To see the full article, click: “When Tax Return Preparers Are Not the Source of the Tax Fraud”

Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.

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