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Jury Sentences Texas Tax Preparers to Prison, Fifth Circuit Affirms

In an unpublished opinion filed on July 19, 2012 in the Fifth Circuit Court of Appeals, the Court affirmed the convictions of Donald and Tonya Womack, the owners of Front Door Tax Services in Houston, Texas.

A jury in the U.S. District Court for the Southern District of Texas found Mr. Womack guilty of 13 counts and Mrs. Womack guilty of 12 counts of aiding and assisting in the preparation of false income tax returns and conspiring to defraud the United State by obstructing the collection of income taxes. Mr. Womack was sentenced to 5 years in prison, followed by 3 years of supervised release. Mrs. Womack's sentence was less severe, with just under 3 years in prison, also followed by 3 years of supervised release. Together, they have been ordered to pay the United States Treasury $161,855 in restitution for tax dollars lost. Both will also be subject to any number of civil tax preparer penalties under Internal Revenue Code § 6694.

In an effort to prevent fraudulent tax preparers from taking advantage of innocent taxpayers, the federal government has been working to implement new education and registration requirements for tax preparers. With these new requirements have come a number of new civil penalties, as well as a renewed focus on prosecuting individuals and companies who hold themselves out as a legitimate tax preparation service. Often times, the IRS will audit the customers of a tax preparation firm that they suspect to be fraudulent to collect information and build their case. Furthermore, it is common for IRS Special Agents to pose undercover as taxpayer customers in an attempt to learn more about the firm 's procedures and tactics.

If you have been contacted by the IRS in connection with a civil or criminal investigation and suspect that there may be an issue of fraud, contact a tax professional to assess your risk and learn about what to expect.

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