Police officers warned by IRS on tax schemes

Consequences of using dishonest preparer can be severe, agent says

March 10, 2004|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

The Internal Revenue Service is warning police officers in Maryland about dishonest tax preparers who promise officers big refunds by filing falsified returns.

Even if an unscrupulous tax preparer draws up a fraudulent return, the ultimately responsibility for its accuracy rests with the taxpayer. Ignorance of the tax law is no excuse.

And, though submitting a return containing inflated deductions or other fraudulent information can spell trouble for any taxpayer, the consequences for police officers are more severe, said Gregory R. Szczeszek, special agent in charge of the IRS criminal investigation division in Baltimore.

In serious cases, officers can be convicted of a felony and lose their jobs and credibility, he said.

"This is a public service announcement to them that they may want to pay particular attention to the return preparers they choose," Szczeszek said.

Last year, the IRS initiated 22 investigations across the country involving police officers and firefighters suspected of filing falsified returns, compared with 29 the year before. Szczeszek would not comment on any tax cases in his district, which covers Maryland, Delaware and Washington.

Of the 17 cases that came up for sentencing last year, nearly all resulted in incarceration, ranging from home detention to prison time. The average prison term was 34 months.

The IRS isn't seeing an increase in such cases but is getting more questions about the role of police officers, Szczeszek said. Typically, when officers have used a shady preparer, the officers are called as witnesses against the preparer.

Judges increasingly are asking why those officers aren't defendants, Szczeszek said.

Often, officers learn about an unscrupulous preparer from a colleague, the IRS said.

"They should be cautious when they are having their returns prepared and the whole station is going to the same return preparer," Szczeszek said.

The most frequent type of fraud involves false or inflated itemized deductions.

Sometimes officers are encouraged to "incorporate" to get certain deductions or to establish a foreign corporation or enter into fraudulent trust agreements, the agency said.

Police representatives say they have never heard of officers using dishonest preparers.

"We haven't had any of our folks get involved in a situation like that," said Cole Weston, president of Baltimore County Fraternal Order of Police, Lodge 4. "It's sound advice for anyone to use a reputable person to prepare their taxes."

Gary McLhinney, chief of the Maryland Transportation Authority Police and former president of the Baltimore City Fraternal Order of Police, Lodge 3, said he, too, is unaware of such schemes.

"Police officers are held to a higher standard, and rightfully so. Any guidance they can give to make sure an officer is not being taken advantage of by unscrupulous preparers is beneficial," McLhinney said.

The IRS advises taxpayers who have filed incorrect or false returns to come clean by submitting an amended return and paying any taxes due.

The agency also requests that suspicions of fraud or a dishonest preparer be turned into the IRS at 800-829-0433.

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