Bozo Tax Tip #6: Add Some Phony Deductions

A few years ago, a prospective client came to me. He had used Western Tax Service, and the IRS was about to audit him. Western, for those unfamiliar with them, had a great way of attracting clients: they invented phony deductions, or padded the amounts of deductions. This went on for years, and once the IRS discovered it, they looked at another Western client, and discovered it was systemic fraud (see this press release).

So why not use the Western Tax Service method? What can go wrong if you change your charitable deductions from $100 to $10,000? And add a uniform deduction of $2500 (those business suits are expensive, you know). And $2500 for miscellaneous unreimbursed business expenses. And….

Because we know that the odds are that the IRS won’t catch me, right? And what’s the worst that can happen to me? I’ll just pay the tax that I would have, right?


What I’ve written above is fraud. When you sign your tax return, you’re signing under “penalty of perjury.” The IRS takes that seriously. That’s why whether you prepare your return yourself, or use a professional, you should review your return carefully. And that’s why every return sent from our office asks the client to review the return. We want you to understand what’s on your tax return.

You should take all the deductions and credits you’re entitled to. But try hard not to take the ones you’re not entitled to, because if the IRS finds you deliberately falsely took those, you’re looking at penalties…which can include fines and even jail time. That’s what the founders of Western Tax Service faced.

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