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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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Are You Saying That An IRS Collection Agent Might Not Be Completely Honest with a Taxpayer?

You know, you’d think with all the challenges the IRS faces – airplanes, llelo/baking powder scares, virtual Tea Partiers – one would think that when on a collection call, agents would apply a spoonful of sugar to help the financial rectal exam go down.

Sadly, we’re informed over at Tax Lawyer’s Blog that it’s typically much more devious than that:

Often, when a taxpayer speaks to a low-level IRS official about a tax issue the official tells him one or more of the following:

• You must pay the debt or you will be criminally prosecuted
• If you don’t pay the debt in full within so many days, your assets will be seized
• It’s a waste of money to hire an attorney

As noted Peter Pappas notes, these three points are, in a word, gobbledygook.

Despite how much you might not want to admit it, attorneys are always useful in legal situations, especially complex ones. You might be able to get out of a traffic ticket on your own but probably not a tax case. An expert is needed (whether it’s a lawyer, CPA or EA). Further, as the post notes, these collectors are not the tax sages that they might present themselves to be, “[T]hese IRS officials are wholly unqualified to give legal advice to taxpayers. They aren’t lawyers, CPAs, or IRS Enrolled Agents and in the great majority of cases lack a substantial background and education in the intricacies of federal tax law.”

And there is the small matter of the agent acting in the best interest of the Federal Government so the modern day Matthew isn’t exactly in the best position to be giving the taxpayer advice.

IRS Collection Officials Intentionally Mislead Taxpayers [Tax Lawyer’s Blog via Tax Update Blog]

IRS Stops Short of Requiring Tax Preparers to Go Through a Full Rectal Exam to Pass Suitability Check

But fingerprints, on the other hand, those will be necessary.

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.

If you’re weren’t sufficiently annoyed with the IRS’s new oversight regulations. This might do the trick.

IRS to Begin Fingerprinting Tax Preparers [AT]

CPAs: Start Your Stimulus Engines

Apparently this video is from last year but whatevs. Since the new year is creeping up fast, it serves as a friendly reminder that all the tax jockeys out there carry some heavy responsibility, stimulating the economy year after year.


Okay, let’s forget about the refunds for two. What’s really worth noting is all the CPAs out there scarfing bagels and guzzling coffee from January until March/mid-April because their time is far to valuable to bother going to the grocery store to buy a piece of fruit. Then think about all the late night take-out. The profession is single-handedly keeping bagel shops, pizza joints and various Asian restaurants in business year after year.

Then Joe Kristan makes the following point:

Never mind that the refunds are a result of overwithholding, or anti-stimulus, the rest of the year. Actually, in a way, it underlines how all “stimulus” spending really works: it takes our money all year, and we’re supposed to feel stimulated when they give a little of it back.

So in reality, the only stimulus is CPAs giving a boost to various segments of the restaurant industry. It’s not ideal but it’s an annual boost they can rely upon, nonetheless.

[via Tax Update Blog via Tax Lawyer’s Blog]