A North Carolina tax preparation business owner has been sentenced to almost four years in prison for a tax fraud scheme that involved hundreds of tax returns and that netted him $700,000. Kapital Financial Services had two locations in Charlotte, and the business owner directed employees to falsify clients’ tax returns, including claiming false deductions, business losses, American Opportunity credits, education credits and earned income tax credits. He also trained his employees on how to create the fraudulent returns to avoid IRS detection and provided them with scripts and cheat sheets. Employees were not allowed to provide clients with copies of their returns, they were only allowed to give clients their refund amount because the fees Kapital charged were taken from the inflated refunds. (https://www.justice.gov/opa/pr/charlotte-tax-preparer-sentenced-prison)
CPAs, get four hours of fraud CPE with our Fraud Essentials for CPAs Webinar. Click here for more information.