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Pennsylvania tax preparer pleads guilty to fraud, avoids prison

| Aug 7, 2012 | White Collar Crimes |

A professional tax preparer from western Pennsylvania who was charged in March 2011 with preparing fraudulent returns for some of his clients has pleaded guilty to one count of tax fraud. As part of the plea deal, the court sentenced the man to six months of home confinement and three years of probation, but he will not serve prison time as he could have been sentenced to if convicted at trial.

The original federal indictment contained 36 counts of tax fraud. Prosecutors claimed that the fraud was contained in 10 tax returns prepared by the accountant. The returns in question were filed for tax years 2004 through 2008. The defendant also was charged with four counts of obstructing an IRS investigation. The charges carried a maximum sentence of three years in prison, $250,000 in fines and a year of probation.

After prosecutors filed the charges, the defendant said that the returns followed the law. He said that the IRS resented his knowledge of the tax code, which led to larger refunds or lower tax bills for his clients, and trying to pressure him. He said that IRS agents threatened his clients and employees with audits if they did not cooperate.

Readers in the Pittsburgh area may wonder why a man who believed he did nothing wrong would plead guilty. Federal prosecutors are often very aggressive when trying tax fraud cases, so it could be that the man and his attorney decided that the risk of a prison sentence was too great if they took the case to trial.

Source: The Tribune-Democrat, “Tax man receives probation,” Bernie Hornick, July 26, 2012

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