THe following came from IRS today.  Just run the numbers for a minute, and note the capacity for a "vivid imagination".  From what I read earlier about this operation, this lady did a lot of truckers' tax returns.  Now, given that unless the operation is really big, she and a few people could only do a few hundred returns a year..........say.......500. 

The article says that 17million was the loss between 03--08.....average 2.8million per year..........that 224 of 243 returns had errors (although the size of the "error" was not noted-------and "error" could be anything from a transposition to a gross negligence item).........so about 100% of the returns were "wrong". 

That would mean that 2.8 / 500 returns = 5600 in taxes per return were lost.  Given that most "truckers" probably would not exceed the 15% income tax rate, plus 15% SE tax rate.........that means that there were 19,000 of "errors" in each return.

That's a lot.

Of course, if a small number would have been used, then it probably would not have gotten as much attention.

I am not judging on this tax outfit--------don't have the facts.

But........be alert that IRS is publicizing that they are stepping up enforcement..........and that means USUALLY that they will audit the documents...........kill the document, automatically kill the deduction........no document, no deduct.

FOR IMMEDIATE RELEASE
WEDNESDAY, APRIL 1, 2009
WWW.USDOJ.GOV

JUSTICE DEPARTMENT ASKS FEDERAL COURT TO SHUT DOWN IOWA TAX PREPARATION FIRM

Tax Return Preparer Allegedly Claims Fabricated And Inflated Deductions, Costing U.S. Treasury Millions in Lost Revenue

WASHINGTON - The United States has brought suit in federal court against Gayle Lemmon of Humboldt, Iowa, the Justice Department announced today. The lawsuit seeks to bar her and her firm from preparing federal tax returns for others. According to the government complaint in the case, Lemmon’s firm, Gayle’s Bookkeeping and Tax Service Inc., prepares federal income tax returns for customers that unlawfully understate tax liabilities by claiming improper deductions for the business use of the home and for non-deductible personal expenses.

The government complaint also accuses Lemmon of fabricating deductions on customers’ returns for charitable contributions and inflating deductions for un-reimbursed employee business expenses. According to the complaint, the Internal Revenue Service has examined approximately 243 returns that Lemmon prepared and found that 224 of them understated the customer’s tax liability. The complaint notes that the tax loss from Lemmon’s alleged misconduct between 2003 and 2008 could be as much as $17 million.

In the past decade, the Justice Department has obtained injunctions against more than 380 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department’s Tax Division Web site.