Tag: Department of Justice

The DOJ Is Not Waiting to Weed Out Sketchy Tax Preparers

Slimy.jpgEarlier this week we learned that the hammer will be coming down on small tax prep shops.
Despite the news of the fresh measures, that didn’t prevent the DOJ from getting some of the riffraff off the streets this week.
Web CPA:

On the heels of the IRS’s plan to begin regulating tax preparers, the Justice Department announced that it has filed six lawsuits this week to stop preparers charged with generating fraudulent income tax returns.
The cases included five civil injunction lawsuits in Detroit, Cincinnati and Chicago filed against several individuals and their tax preparation services. However, the trend didn’t start this week. In December, the government filed a civil injunction suit against 12 individuals and entities in Providence, R.I.

Long/short: thousands of tax returns were falsified by throwing all kinds of deductions on the returns that couldn’t be substantiated including cash donated to The Human Fund and bogus business expenses.
As Joe noted on Wednesday, it’s difficult to reason that even after the new requirements are in place, some of the more dodgy tax preparers won’t slip through the cracks. Consumers dumbfounded by our mind-job of a tax code will continue to going to shiesty 1040 jockeys that will promise low fees and bigger refunds. Ultimately they’ll pay more in the long run.
Justice Department Cracks Down on Tax Preparers [Web CPA]

The Department of Justice Is Not Impressed by Your Knowledge of the Internal Revenue Code

Or your perceived knowledge. One would assume that if you wrote a book titled Cracking the Code: The Fascinating Truth About Taxation In America, that you would be very familiar with this:
Tax Code.jpg
That’s the code. Four thousand some-odd pages of pure ecstasy.
Tax Update Blog tells us about Peter Hendrickson who is the author of Cracking the Code and his problems doing just that:
DOJ press release via TUB:

The 10-count indictment charged that for the calendar years 2000, 2002,2003, 2004, 2005 and 2006 Hendrickson filed IRS Form 1040 (income tax returns) and/or IRS Form 4852 (Substitute for Form W-2) stating under penalties of perjury that he had received no wages in those years. The indictment indicated that he had in fact received wages in those years in varying amounts. The evidence produced at trial established that Hendrickson had in fact received taxable wages and that his claims to the contrary were knowingly false. In reaching the verdicts, the jury rejected Hendrickson’s defense that he had a good faith belief that his statements regarding his lack of wages were true.

Followed by Joe Kristan’s thoughts:

The tax code is an awful mess, and Congress never passes up a chance to make it worse. That doesn’t mean there is a secret formula from the Illuminati that you can invoke to make it part for you like the Red Sea did for Moses.

Or that you can’t publish a book that probably cites said formula.
Time to Get a New Code-Cracker [Tax Update Blog]