Be Careful Who You Trust With Your Tax Return

One of the most common and costly mistakes taxpayers make is trusting the wrong person to prepare their taxes . A recent federal case out of Florida shows how that decision can expose taxpayers to serious risk, even when they believe they're doing everything right. Khristine N. Harper, a Pensacola tax preparer, pleaded guilty to 20 counts of aiding and assisting in the preparation of false tax returns and one count of identity theft. According to court records, Harper routinely filed fraudulent returns for clients by fabricating deductions and credits that clients never provided artificially inflating refunds and reducing tax liabilities. When Harper learned she was under investigation by IRS Criminal investigation, she allegedly attempted to conceal her activity by changing her business name in filing returns using a stolen Preparer Tax Identification Number (PTIN). For just 20 returns cited in the indictment, the IRS identified more than $103,000 in tax losses. The Hidden Danger for Taxpayers While this case focuses on the preparer , taxpayers often suffer the consequences. If a return contains false information even if the taxpayer didn't knowingly provide it the IRS may still pursue: * Back taxes, penalties and interest * Audits of prior-year returns * Loss of future credits or refunds * Extended scrutiny of all filings

Hiring a preparer who "guarantees big refunds" or cuts corners can turn a routine tax filing into a long-term problem. The Takeaway Taxpayers are ultimately responsible for what's on their return. That's why it's critical to work with a qualified, ethical and transparent tax professional who explains what's being filed and why.

If you're concerned a past return may have been prepared incorrectly or if you've received an IRS notice tied to a preparer's work, a tax resolution professional can review your filings , correct mistakes and help protect you from further exposure. When it comes to taxes, who you hire matters more than most people realize.

Being Honest With Your Tax Pro Matters Another common issue we see especially with cash-heavy businesses is owners providing incomplete or false information to their tax preparer, believing it reduces risk or taxes owed. A recent federal case out of Wyoming shows how dangerous that assumption can be. Shu Ping Chen, owner of a Cheyenne restaurant, was sentenced to 18 months in federal prison for filing a false tax return. According to court documents, Chen knowingly gave false financial information to her Certified Public Accountant, fully aware it would be used to prepare and file her tax returns. Over a five-year period she underreported nearly $960,000 in cash receipts, resulting in hundreds of thousands of dollars in unpaid federal and state taxes. When investigators from IRS Criminal Investigation executed search warrants at her business and home, Chen was reportedly caught attempting to destroy business records further compounding the seriousness of the case. The Takeaway for Business Owners Your Tax Pro can only work with the information you provide. Supplying false or incomplete records doesn't protect you it shifts liability squarely onto your shoulders. Even if a professional prepares the return, the taxpayer is ultimately responsible for it's accuracy. Cash businesses are already under heightened scrutiny and deliberate underreporting is one of the fastest ways a civil tax issue becomes a criminal case. The Safer Path Forward If your books aren't clean, estimates were used or past returns don't fully reflect reality, the solution isn't concealment it's proactive correction. A qualified tax resolution professional can help you address past mistakes, correct filings and work with the IRS before issues escalate. When it comes to taxes, honesty with your advisor isn't just good practice it's essential protection. When it comes to tax preparation or tax resolution , who you trust matters. Anyone promising unusually large refunds, "secret" tax hacks or guaranteed results is putting your future at risk and theirs. Work with a qualified ethical professionals who follows the law, stands behind their work and explains every number on your return. If something looks too good to be true, it almost always is. If you need help fixing past returns , resolving tax issues or making sure you're protected moving forward, reach out today. We're here to help you stay safe, compliant and confident the right way.