Qui Tam

Two Income Tax Preparers sued by DOJ for filing over $70 Million in Fraudulent Tax Refunds

By LaBovick Law

The United States has sued Iliana Sorensen of Hialeah, Fla., and Gerald A. Poynter II of Kansas City, Mo., for allegedly preparing tax returns claiming more than $70 million in fraudulent tax refunds based on fake withholding reported on Forms 1099-OID.

The Internal Revenue Service (IRS) detects and stops most fraudulent refund claims. The recent complaints allege that Poynter's and Sorensen's fraudulent tax return preparation has resulted in more than $7 million in erroneous refunds to their customers.

According to the complaints, the scheme Poynter and Sorensen employ is part of a trend among tax defers to file frivolous tax returns and forms in an attempt to escape their federal tax obligations and steal from the U.S. Treasury.

Customers who participate in tax fraud schemes of the type alleged in the complaints may be subject to sizeable penalties for filing returns with excessive refund claims —including a penalty equal to 20 percent of the amount improperly claimed. The penalty applies even if, as usually happens, the IRS detects the false claim and blocks a tax refund. If a taxpayer improperly claims a $2 million refund, they could be liable for a $400,000 penalty as well as other penalties and possible criminal prosecution.

It is unlawful to file a false tax return. If you know of someone falsifying information on a federal tax return report the fraud. Tax fraud affects all taxpayers. We encourage you to seek counsel on your legal rights as a whistleblower of tax fraud. Depending upon the fraud and your information regarding the fraud, you may be entitled to a reward.

Click on the following link to read more from the Department of Justice on the case involving: Two Suits That Are Part of Nationwide Enforcement Effort Against Promoters of Fictitious Withholding Scam 

 

Full post as published by Whistleblower Law Blog on October 26, 2010 (boomark / email).