Feds charge tax pro with filing thousands of false returnsKen Berry
September 20, 2011 — 1,017 views
Do you tell your clients to comply with the tax law? Make sure you practice what you preach. In an extreme example, a tax return preparer in Washington D.C. is facing criminal charges in federal court for allegedly scamming the IRS out of almost $14 million.
LaDonna Davis worked for 2FT Fast Facts Tax Service, a tax preparation firm owned by her aunt. Davis is accused of filing 3,044 falsified federal tax returns, 665 false D.C. returns and an undetermined number of false state returns. The Internal Revenue Service says that the federal returns generated $13,953,317 in fraudulent income tax refunds from 2006 through 2011.
According to court documents, Davis filed returns listing phony business entities, itemized deductions, and tax credits, causing the taxable income of clients to be grossly understated. Virtually every client received a fraudulent federal tax refund. If a client didn't have the documentation required to claim tax benefits, the IRS said Davis would simply come up with a figure needed to provide a favorable tax result. She also allegedly provided clients with false documentation for the charitable deductions in the event they were ever audited.
The only tax return preparation training David received came from her aunt. A plea bargain is expected in the case, while Davis's aunt is yet to be charged.