Tax Litigation Law Office of Scott Kauffman
(949) 474-1820

Hackney Literary Award
Mighty River Short Story Contest Winner

CPA Guilty of Misdemeanor Tax Fraud Loses Suspension Appeal

The Treasury Appellate Authority has overturned a reduction in the length of the professional license suspension of a Florida CPA who pled guilty in 2008 to misdemeanor tax fraud. A 36-month license suspension and had won a reduction to 24 months on appeal.

The CPA pled guilty to helping a client -- a self-professed priest -- hide income from the IRS. When the IRS Office of Professional Responsibility (OPR) began an expedited proceeding to suspend his license indefinitely, however, he recanted his admission of guilt, accused his criminal defense attorney of coercing him into pleading guilty, and accused the federal prosecutor of misconduct.

The OPR ultimately recommended 36 months in the original hearing before an Administrative Law Judge but she ruled, citing a number of mitigating and aggravating factors, that 24 months was the appropriate penalty for the tax preparer in this case.

The Treasury Appellate Authority disagreed. While it agreed with some of the Administrative Law Judge's reasoning, the panel found that the aggravating factors in this case far outweighed any mitigating ones.

In particular, the panel cited two "very seriously aggravating factors" that offset any mitigating factors: His "false and misleading statements during the disciplinary process and his lack of remorse and attitude towards his crime and conviction."

In a statement, OPR Director Karen L. Hawkins applauded the appellate panel's decision to uphold lengthy suspensions for tax preparers convicted of even misdemeanor tax fraud.

"The Appellate Authority makes it clear in his decision that he considers a conviction of knowingly and willfully assisting in the failure of another to pay income tax to be a very serious charge that strikes at the heart of the agency's mission and is directly contrary to the duties of one who practices before the IRS," she said.

In addition to increasing the length of the CPA's suspension, the Appellate Authority also reset its commencement date from August 2008, the start of his criminal probation, which the Administrative Law Judge had thought was most appropriate. The Authority determined that his suspension did not begin until January 13, 2009, nearly six months later.

Source: Accounting Today, "Suspension Lengthened for Florida CPA Who Aided in Fake Priest Tax Evasion," Danielle Lee, April 27, 2011

No Comments

Leave a comment
Comment Information