Playing with Dynamite

25307069 - blank income tax forms american 1040 individual income tax return form

TNT, another word for dynamite, is a chemical compound used mainly for demolition purposes and mining. A Danville, Virginia man, who named one of his two tax businesses using the same three letters, committed tax refund fraud which ignited the federal government’s determination to put this criminal in jail.

Dynamite contains nitroglycerin – a poisonous and explosive liquid – along with other volatile compounds. This highly destructive compound can be likened to fraud, which can be just as harmful. Mix together greedy criminals who will do anything to make a quick buck with government programs that doll out money and you have the potential for an explosive situation that can impact many victims. (In this case, the federal government, the business owner’s clients and the American taxpayers.)

Today’s fraudster from Southern Virginia owned a tax preparation business in Danville as well as in Rocky Mount. He used his two offices to prepare fake tax returns, claiming bogus business losses so he could request larger refunds than his clients were entitled to. (Perhaps he charged his clients a higher fee to prepare their taxes or took a cut of the illegal returns.)

According to the article, the Internal Revenue Service (IRS) knew that the tax preparation business owner had a history of preparing false returns. The IRS revoked his Electronic Filing Identification Number (EFIN) in 2012. But, that was not enough to stop this determined fraudster from detonating another plan to scam the agency. (He simply used someone else’s EFIN to continue his illegal scheme.)

The 49-year-old tax preparer caused a loss of more than $250,000 to the IRS. He pleaded guilty to tax refund fraud for aiding and assisting in the preparation of a false tax return. The Danville, Virginia resident was sentenced to two-and-a-half years in prison to be followed by one year of supervised release. (And, he also owes the IRS $335,389 in restitution.)

 As we approach the tax return deadline this year, it’s important to remember a couple of things when looking for a trustworthy tax preparer. Always ask for a recommendation and check the preparer’s history through the Better Business Bureau. Depending on the type of tax preparer, you can also check for disciplinary actions and the status of their licenses through various organizations. For more tips on choosing the right tax preparer for you, check out the advice offered by the IRS here.

Today’s “Fraud of the Day” is based on a Department of Justice press release entitled, “Virginia Tax Return Preparer Sentenced to Prison for Filing Fraudulent Returns,” posted on October 24, 2017.

A Danville, Virginia, resident was sentenced to 30 months in prison for aiding and assisting in the preparation of fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Rick A. Mountcastle for the Western District of Virginia.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.