The federal charges levied against a local tax preparer serve as a reminder to residents and businesses to take steps to protect themselves from unscrupulous return preparers.
Last week, a U.S. District judge sentenced Joseph Amaya to 12 months in federal prison for aiding and assisting in the preparation of false tax returns. The court also ordered Amaya to pay more than $1.6 million in restitution to the Internal Revenue Service. He had pleaded guilty to those charges in February.
According to IRS and court documents, from 2014-18, Amaya co-owned and managed Tax Machine, Inc., a tax preparation business in Kissimmee. In his business dealings, Amaya knowingly prepared and filed — and trained his employees to prepare and file — numerous false and fraudulent tax returns on behalf of Tax Machine customers.
Prosecutors said Amaya and his employees created bogus expenses or deliberately overstated true deductible expenses such as unreimbursed employee expenses, gas, mileage, medical and dental expenses, and gifts to charity. Amaya also trained employees to include false claims of net business losses on tax returns.
By including those false and fraudulent material statements on the income tax returns of Tax Machine customers, Amaya and his employees eliminated certain tax liabilities that their customers otherwise would have had, generated tax refunds that they were not entitled to, or did both. The IRS reported its tax loss as a result of Amaya’s conduct was approximately $1.6 million.
“When Joseph Amaya used his tax return preparation service, Tax Machine, Inc., to try and make a fast buck for him and his clients, he underestimated the special agents of IRS Criminal Investigation,” said Special Agent in Charge, Brian Payne, of IRS Criminal Investigation. “At the IRS, protecting taxpayer money is a matter we take seriously. An integral part of the agency’s mission involves detecting and catching fraudulent tax refund claims.”
The IRS, which has a dedicated Criminal Investigation Division to investigate these crimes, reminds taxpayers to file accurate tax returns and choose a tax preparer wisely.
Tax return preparers are vital to the U.S. tax system — Approximately 55 percent of taxpayers use a paid preparer according to the IRS. 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 client’s money, personal, and financial information.
Taxpayers can avoid falling victim to unscrupulous preparers by following important steps.
“We at the IRS recognize that the annual effort to prepare and file an accurate tax return can cause some taxpayers a fair amount of anxiety. Don’t compound your fears by falling victim to a dishonest return preparer. Protect yourself by practicing due diligence in selecting a tax preparer,” Payne said.
Here are some tips when choosing a tax preparer, straight from Lauren Kocinski, IRS Criminal Investigation Special Agent out of its Fort Myers office:
Look for a preparer who is available year-round in case questions arise after the filing season.
Ask the preparer for their 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. Question preparers who offer to take their payment from your refund — refunds should go directly to the taxpayer, not the preparer.
Never sign a blank or incomplete return. Fully review the return before signing. Always remember, even if you use a preparer, you are ultimately responsible for your tax return.
Avoid preparers claiming they can get you a larger refund than other legitimate preparers. If a preparer suggests a tax strategy that sounds questionable, remember the old adage: if it sounds too good to be true, it probably is.
For more tips on choosing a tax professional or to file a complaint against one, visit www.IRS.gov.
