There are laws mandating that advertisements be accurate. Sometimes, though, you can get in trouble for being ‘truthful.’ Michael Raymond Martinez of Fullerton, California did himself no favors by his advertisements.
Mr. Martinez was a tax professional in Fullerton (Orange County), and he advertised, “The Largest Refund…Guaranteed!!!” And he did give his clients very large refunds. It’s how Mr. Martinez operated that was the cause of trouble. Mr. Martinez met with his clients, picked up their documents, received his payment, and then prepared their returns. Nothing out of the ordinary with that.
However, he didn’t have his clients review the returns. So how could clients sign the returns if they hadn’t reviewed them? That was definitely an issue. Of course, given that Mr. Martinez invented false deductions and expenses for his clients (all of which lowered their tax liability), he likely did get his clients “The Largest Refund[s].” Illegal, of course.
Unfortunately, the IRS caught on to the scheme. Indeed, that was inevitable from the start. Sooner or later a client would look at the transcript of his return and see moving expenses when they hadn’t moved, education deductions when they weren’t in college, or phony itemized deductions and wonder what was going on. Given the tax loss to the IRS was $1,155,006, this was going to get some attention. There was one other matter: Mr. Martinez didn’t bother to report his income from preparing those returns for 2011 and 2012; oops.
Mr. Martinez was sentenced last week to 21 months at ClubFed. He’ll also have to make restitution of $205,465 to the IRS.
Tags: BozoTaxPreparer