Department of Justice Michigan Tax Fraud Lawsuit Teaches Important Lesson to All this Tax Season!
Tax laws are governed by strict deadlines and even stricter penalties if suspected of tax fraud; just ask a Michigan man who is being sued by the Justice Department for allegedly falsifying customers' W-2 forms!
The Justice Department is asking a federal court to ban Donald A. Gray of Portage, Michigan from preparing federal tax returns for others. The government filed a complaint last week with a U.S. District Court in Grand Rapids alleging that Gray doctored W-2 statements in order to claim false tax refunds for customers. The tax fraud suit also requests a court order forcing Gray to turn over a list of customer names, home and email addresses, and Social Security and phone numbers to the government.
According to the Department of Justice press release explaining the tax fraud lawsuit, Gray has allegedly prepared false W-2 statements reducing or even eliminating customer incomes that were correctly reported by their employers. Gray has then filed the false W-2 forms with customer income tax returns and sought fraudulent tax refunds.
The U.S. Government sued Peter Eric Hendrickson of Commerce Township for a nearly identical Michigan tax fraud scheme last year. Hendrickson, his wife and seven other people were all accused of replacing correct W-2 and 1099 forms with false documents that were submitted with their federal tax returns and then netting a total of nearly $150,000. In the tax fraud lawsuit against Gray, the Department of Justice refers to these defendants and how they've been ordered to pay back the false refunds.
Falsifying W-2 and 1099 forms in order to receive fraudulent returns is a serious offense that the Justice Department and IRS have put at the top of their respective radars. For example, this offense is the number one target on the IRS's list of "Dirty Dozen" tax scams. According to the press release, the Justice Department's Tax Division has obtained more than 215 injunctions to stop the promotion of such schemes.
Penalties for receiving false tax returns after filing fake W-2 and 1099 forms may include heavy fines and even imprisonment, possibilities which could loom large for Gray if found guilty in the tax fraud lawsuit against him.
Be aware of similar tax fraud schemes and the risks associated with them, and avoid all involvement. The Department of Justice has shown that it will investigate all of Gray's customers if it can get this court order. Even if a person was not involved in the scheme but one of Gray's customers, he or she may be subject to interrogation from the government.
While tax laws are complex and may seem confusing, the penalties governing tax fraud are quite clear and understandable! If you have questions when filing taxes this season or need help, make sure that you rely on someone you can trust. Get started by speaking with a tax lawyer in your area.