Law Offices of Connie Yi, PC - estate planning
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Clients liable in tax preparer’s fraud scheme

| Jan 16, 2014 | Uncategorized |

When we take our taxes in to have them prepared by a professional, we trust that the professional’s advice will lead us in the right direction and get the best tax rates while complying fully with the law. Unfortunately in some cases it does not turn out this way, and taxpayers can end up in trouble if their trusted tax preparer takes improper deductions.

This is the situation that more than 3,000 people find themselves in upon the conviction of a tax preparer for taking more than $3 million in improper deductions for her clients. The tax preparer allegedly filled out tax returns with deductions for student loans that her clients did not take out, giving them much larger than anticipated tax returns. Interestingly, the tax preparer is not accused of pocketing any of the extra money from the returns, but instead forwarding it directly to her clients.

These types of cases arise more often than many California taxpayers realize, since tax preparers will often stretch the rules to help find savings for their clients. If the IRS disagrees with the deduction or believes that it was taken in bad faith, the both the client and the tax preparer could be liable for the wrongdoing.

In this case it is not clear whether the clients were aware that the tax preparer was taking a deduction that they were not qualified to take. The only indication that they may have known was the fact that that particular tax preparer had a large number of clients and a busy workload, indicating that word of mouth recommendations in the community were guiding people towards the unusually large deduction.

Source: NBC Chicago, “Tax Preparer Convicted of IRS Fraud,” Phil Rogers, Jan. 9, 2013. 


FindLaw Network

Recent Blog Post

Even a fortune can disappear without sound estate planning

Some figures baffle.Like the speed of light. Like the age and size of the universe. And like estimates pegging the personal fortunes of America's richest families.Consider this imagery relevant to the storied Vanderbilt family for a moment: a pile of money equaling...

Remarrying couples unquestionably need to focus on estate planning

Many remarrying California individuals fail to timely consider and update existing estate plans to reflect new realities.Don't be one of them. Many remarrying California individuals fail to timely consider and update existing estate plans to reflect new...

View More Blog Posts