With tonight’s season premier of Breaking Bad, it feels apropos to note a tax “professional” who is accused of bad behavior. The US Department of Justice filed suit against Michael Turner of San Diego.
…failed to sign or affix a Preparer Tax Identification Number (PTIN) to many of the returns that he has prepared. In addition and according to the government, Turner takes bogus deductions on his customers’ returns in order to claim larger refunds for his customers. His customers then recommend Turner as a tax preparer to their friends, which helps Turner to expand his customer base and further increase his own profits. Specifically, the government alleges that Turner claims inflated or fabricated deductions on the Schedule A of his customers’ Form 1040 tax returns, claiming that his customers have large non-cash charitable contributions and unreimbursed employee expenses. The complaint also alleges that when Turner’s customers are audited, Turner has provided false documents to those customers in an attempt to assist them in substantiating charitable contributions and employee expenses that they did not incur. According to the complaint, however, Turner has instructed his customers not to identify him as their tax return preparer in communications with the Internal Revenue Service (IRS).
That’s a multitude of bad behavior if proven. Of course, Mr. Turner doesn’t have a license, right? Well, no. California requires all paid tax preparers to have a license. Preparers who are unenrolled (not EAs, CPAs, or attorneys) must obtain a license from the California Tax Education Council (CTEC). And Mr. Turner has a license from CTEC.
This shows two points: First, that having a license cannot stop bad behavior. And second, the government has methods today of stopping tax preparers who are breaking bad. As the DOJ noted in their press release, “In the past decade the Justice Department Tax Division has obtained injunctions against hundreds of tax preparers.” I suspect this point just might make it into the arguments in the Loving appeal.