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Here’s Another Sad Story About a Thief Who Got Dinged By The IRS For Not Reporting Stolen Income

Posted on by Adrienne Gonzalez

This poor bastard has been sentenced to a year and a day for gyping the IRS out of their chunk of the money he stole from his employer:

[Jeffrey] Scher, a certified public accountant, was employed as the chief financial officer at Bodek and Rhodes, a Philadelphia-based T-shirt wholesaler.  Scher received cash receipts from Bodek and Rhodes’ controller for deposit into Bodek and Rhodes’ bank account.  Instead depositing all of the money into his employer’s bank account, Scher surreptitiously diverted cash receipts belonging to Bodek and Rhodes to his personal bank accounts.

In filing his Federal income tax returns, Scher did not report the cash receipts belonging to Bodek and Rhodes which he converted for his personal use.  Scher was charged with 5 counts of filing a false tax return.

The case was investigated by the Internal Revenue Service Criminal Investigation.

Well it could be worse. When he was charged last year, he faced a maximum possible sentence of 15 years imprisonment, a $1,250,000 fine, three years of supervised release, and a $500 special assessment.

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Certain tax return preparers who must pass a suitability check will have to provide their fingerprints so that a Federal Bureau of Investigation database search can be conducted. Generally, the fingerprint requirement will affect those preparers who currently have provisional PTINs.

Under the current proposed regulations, any participant in the PTIN, acceptance agent, or authorized e-file provider programs who resides and is employed outside of the U.S. will not have to be fingerprinted to participate in these programs. Those preparers, however, must comply with all the other elements of the suitability check. In addition, the Treasury Department and the IRS are continuing to study which additional requirements should apply to people outside the U.S. Any additional requirements will be set forth in future guidance.

Attorneys, CPAs, enrolled agents, enrolled retirement plan agent and enrolled actuaries also are expected to be exempt from the fingerprinting requirement at this time. However, they are still required to answer all the suitability questions on the PTIN application, such as whether they have been convicted of a felony in the previous 10 years. Individuals participating in the PTIN, acceptance agent, or authorized e-file provider programs also are required to meet any other requirements of the programs in which they are participating.

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In 2008, the year for which most recent data was available, IRS computer programs flagged compliance issues for more than 8,000 of its 109,469 employees and ultimately determined that almost 2.8% had not complied with the law. But those monitoring systems missed 133 additional employees who were potentially not compliant with tax law over a two-year period, according to the audit. The employees were flagged for potentially filing their tax returns late, paying their taxes late, not reporting all of their income and at least one example of a criminal investigation with an additional tax assessment.

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