MONTANA — The Internal Revenue Service’s Criminal Investigation Division (IRS-CI) reminded taxpayers today to file accurate tax returns and choose a tax preparer wisely. The nation’s tax season starts on Friday, February 12, 2021 when the agency begins accepting and processing 2020 tax year returns.
U.S. persons are subject to tax on worldwide income from all sources. Most taxpayers meet this obligation by reporting all taxable income and paying taxes according to the law. However, those who willfully hide income should know that the IRS works across its divisions to ensure the highest possible tax compliance. Taxpayers found to be committing fraud may be subject to penalties including payment of taxes owed plus interest, fines and jail time.
“Regardless of the source of income, all income is taxable,” said Andy Tsui, Special Agent in Charge for the state of Montana. “The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS’ enforcement strategy. We continue to aggressively pursue those who attempt to defraud America’s tax system.”
“As tax season begins, I want to remind taxpayers and tax preparers alike that our system depends on honesty and accountability. Those who try to cheat on their taxes or attempt to defraud clients will be investigated and prosecuted,” Acting U.S. Attorney Leif Johnson said.
Tax return preparers are vital to the U.S. tax system. As of tax year 2018, 55 percent of taxpayers used a paid preparer. Although most preparers provide honest and professional services, there is a small number of dishonest preparers who set up shop during filing season to steal money, personal and financial information from clients. Taxpayers can avoid falling victim to unscrupulous preparers by following important steps.
Tips when choosing a tax preparer:
- Look for a preparer who is available year-round in case questions arise after the filing season.
- Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN), which is required for paid preparers.
- Inquire about the preparer’s credentials and check their qualifications.
- Ask about service fees. Avoid preparers who base fees on a percentage of their
- client’s refund or claim to offer a bigger refund than their competition.
- Never sign a blank or incomplete return and review it before signing. Refunds should go directly to the taxpayer, not the preparer.
For more tips on choosing a tax professional or to file a complaint against one, visit IRS.gov. Taxpayers who suspect tax violations by a person or business, may report it to the IRS using Form 3949A, Information Referral.
The IRS Criminal Investigation Denver Field Office is committed to protecting Montana taxpayers from others cheating the U.S. tax system. Here are some examples of some of the most egregious criminals recently investigated and brought to justice:
- Michael Lee Van Auken received a 28-month prison sentence for filing a false tax return, wire fraud and money laundering. Van Auken, posing as a financial services manager with both law and accounting degrees, embezzled over $700,000 from a Montana family by offering various financial services, including investments opportunities, filing personal and business tax returns, and wealth management planning as part of the scheme. Van Auken, who created various business entities to perpetrate the embezzlement while failing to provide the promised services, used the funds for personal expenses and investing in foreign currency trading. Van Auken was also ordered to pay restitution to the family of $719,340 and $165,195 to the IRS.
- Kerry Snow Yeager was sentenced to serve 25 months in prison for embezzling $316,231 from her employer. Yeager stole the funds by conducting unauthorized ATM cash withdrawals, unauthorized use of a company debit card, and forging the business owner’s signature to cash or deposit checks into her personal bank account. Yeager then failed to report and pay taxes on the money she embezzled from her employer.