Three Bozo tax preparers are in trouble this week. Two are the target of a Department of Justice lawsuit to shut them down; the other finds himself facing tax evasion charges.
Let’s start in Clive, Iowa. Jill Schwartz-Musin and her husband Howard Musin own SSC Services. They’ve been very successful, preparing about 5,000 returns for small businesses over the last three years. And I can see why they’ve been successful. Unlike most preparers, if you use SSC you can allegedly deduct expenses such as tanning salons, hair and nail care, and gifts to family members as deductions. And even that trip to Cancun was allegedly deductible. Needless to say, such personal expenses aren’t deductible. If the allegations are true, Mr. & Mrs. Musin will likely need to find a new profession. Those who’ve used SSC are likely to receive “Dear Valued Taxpayer” letters from the IRS. Joe Kristan has more.
Let’s head next to Sarasota, Florida. Carl Prater operated New Found Freedom (doing business as Tax Escape Service). Mr. Prater basically was in the same situation as Mr. & Mrs. Musin. Back in December 2002 he was the target of a Department of Justice lawsuit, and a temporary injunction was issued against him. Mr. Prater sold packages for up to $26,000 that stated that US income was exempt from US tax (proving again that a sucker is born every minute). Most individuals would figure it’s time to move on after being the target of a federal injunction. (It appears from the record that a permanent injunction was issued in 2005.)
Apparently, that wasn’t the case for Mr. Prater. The IRS and the Department of Justice allege that he ignored the temporary and permanent injunctions that were issued, and he continued to sell his “tax escape” package that states that income earned in the US is exempt from US income taxes. (Hint: If you take that position there is a way you will escape paying taxes. You could be arrested on tax evasion and find yourself working for pennies a day at ClubFed.) Mr. Prater has been charged with a litany of tax-related offenses: aiding and assisting in filing false tax returns, failure to file tax returns, criminal contempt, structuring transactions, and lying before a grand jury. Mr. Prater is looking at a lengthy term at ClubFed if he’s found guilty and a fine of up to $1.95 million.
If someone tells you that you can escape taxes in one of the ways described above, run in the other direction.
Tags: BozoTaxPreparer