Tax Return Preparers targeted by CI and the DOJ

I have listed below some links to various actions against tax return preparers. As we all know there are all sorts of unscrupulous tax return preparers. I am aware of the fact that the IRS CI and the DOJ have targeted programs to reveal unscruplous tax return preparers who willfully file false or fraudulent tax return preparers. We should all applaud those actions. However, I am also aware of the fact that the IRS Crilminal Investigation Division and the DOJ are very often over zealous in the prosecution of tax return preparers. The first two links deal with a case I know something about - Victor Carlyle Sullivan, an elderly CPA who makes a living preparing tax returns. My comment deals with what I view as "DOJ abuse" of Mr. Sullivan. I have first hand knowledge of these facts.

The organization described (see the first two links below) deal with Administrative Services, Ltd.(ASL). ASL promoted a Ponzi scheme, and those who invested in ASL had their money embezzled among other bad things. I represent a number of investors in ASL who had their moeny embezzled and that is why I have a lot of personal information about the ASL operation. ASL refered some of the investors to Mr. Sullivan who prepared tax returns. Mr. Sullivan was not part of the ASL operation, although he attended one of the ASL seminars. IRS civil examiners audited Mr. Sullivan and apparently referred him to the the DOJ. The "kicker" to this story is that the DOJ sought to enjoin Sullivan from promoting ASL and preparing tax returns about 4 years after ASL was defunct. I will repeat that point: the DOJ sought to enjoin Sullivan, as a promoter of ASL, even though he was not a promoter of ASL and about four years after ASL was a defunct organization without employee, without a busuness, and dormant. The compromise with the DOJ was that he could continue to prepare tax returns but he agreed to the injunction to not participate as a promoter of ASL. I was a first hand witness to these facts: the DOJ actually took the time and energy to get a "win" on an injunction to prevent a CPA from promoting a defunct organization.

Although we all want unscrupulous tax return preparers to be punished for filing fraudulent tax returns,understand that CI and the DOJ can and do go after innocent tax return preparers. The IRS does have one or more software programs targeting tax return preparers with clients that show a high error rate. If they tie in large errors of taxpayers with a tax return preparer, they will audit the tax return preparer. Those audits are difficult because the IRS will interview the clients of the return preparers. CI will flash their badges in the faces of the clients and ask them specific questions. For example, the question mighgt be: "did the return preparer give you this $5,000 charitable deduction or was this your deduction which you can document?" The client will be obviously be intimidated by the questions and may very often disclaim knowledge about the numbers. It is quite easy for CI to intimidate clients into making false accusations. That is one of the risks of being a tax return preparer. One never knows if or when CI is interviewing one or more of your clients.

The point of the Sullivan story is that CI and the DOJ can be shockingly overzealous.
Why would the DOJ want to enjoin a CPA from being a promoter in a defunct organization? Obviously the prosecutor wanted another win against a CPA even though the injunction was meaningless. I was and am personally appaled by the Sullivan bogus injunction.

This story is worth remembering. I have no problem with CI and the DOJ doing their job, and they have done a good job of stopping abusive and unscrupulous tax return prearers. On the other hand, they sometime pick on tax return preparers who are perhaps unskilled, negligent or otherwise innocent of preparing false tax returns.

If you suspect that you (as a tax return preparer) are being targeted by CI, you need immediate representation. Every tax return preparer and every other taxpayer have a right to representation by a tax attorney. The IRS CI cannot talk to anyone who wants to be represented by a tax attorney. Another point that few understand is that the DOJ is aggressive and it is very expensive to defend against the DOJ in the courts. For low income/ low asset tax return preparers, it is an unfair match. The court appointed attorneys have very little knowledge of tax law, and they work out of their case assinments very quickly by asking their clients to accept one plea of guilt.

If you have any questions about these issues, all 888 712-7690 and ask to speak with Alvin Brown, Esq.


http://www.usdoj.gov/tax/prtax/Sullivan_StipPermInjOrder.pdf
http://www.usdoj.gov/tax/txdv07180.htm


http://www.usdoj.gov/tax/txdv08620.htm

http://www.usdoj.gov/tax/txdv08565.htm

http://www.usdoj.gov/tax/txdv08508.htm

http://www.usdoj.gov/tax/txdv08497.htm

http://www.usdoj.gov/tax/Dominguez_OrderPermInj.pdf

http://www.usdoj.gov/tax/txdv08452.htm

http://www.usdoj.gov/tax/txdv08430.htm

http://www.usdoj.gov/tax/txdv08413.htm

http://www.usdoj.gov/tax/txdv08386.htm

http://www.usdoj.gov/tax/txdv08362.htm

http://www.usdoj.gov/tax/txdv08318.htm

http://www.usdoj.gov/tax/txdv08295.htm

http://www.usdoj.gov/tax/txdv08253.htm

http://www.usdoj.gov/tax/txdv08251.htm

http://www.usdoj.gov/tax/txdv08203.htm

http://www.usdoj.gov/tax/txdv08191.htm