The Internal Revenue Service’s Office of Professional Responsibility has obtained the disbarment of enrolled agent Lorna M. Walker for stealing a client's tax payments and preparing tax returns with false deductions for multiple clients.
Walker's enrolled agent status and ability to prepare federal tax returns were revoked for at least five years. She practiced in the Seattle area.
“Practitioners who disregard their responsibilities to the tax system and their clients can expect to hear from OPR," said IRS OPR director Karen L. Hawkins in a statement. "Any tax professional who steals from a client or causes them undue tax problems is unfit to practice before this agency."
In a Final Agency Decision, the Administrative Law Judge disbarred Walker for misappropriating client payments intended for the IRS in furtherance of an offer in compromise, and for preparing multiple returns containing Schedule C deductions for which she could not produce substantiation on audit.
Walker was engaged to represent a taxpayer in a collection matter, according to the IRS. The client gave Walker two money orders totaling $1,500 to forward to the IRS along with an offer in compromise for delinquent taxes. The judge found that Walker altered, endorsed and cashed the money orders for her own personal use, which are acts of willful incompetent and disreputable conduct under Circular 230.
The judge also found that Walker prepared Forms 1040 for seven clients claiming Schedule C deductions that were unsubstantiated and unsupportable. Walker failed to exercise due diligence in preparing the Schedule C forms, the judge found, thereby violating multiple due diligence provisions contained in Circular 230.
Walker also failed to respond to the administrative complaint and the motion for default judgment, the IRS noted. The judge determined that because Walker failed to respond either to the complaint or to the motion for default judgment, she was deemed to admit all the allegations in the complaint, and to not oppose the default motion.
6 Comments
Denise, you should have learned by now that Florida is a wide open State for payoffs. A a haven for corruption. So much for their law abiding claim.
Posted by: tego@verizon.net | March 11, 2013 10:38 PM
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And of course "no jail time." Another "too big to prosecute" for the IRS. :-(
Posted by: tego@verizon.net | March 11, 2013 10:36 PM
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Hi Denise,
Why don't you report to the IRS with your information as discribed, here is the form : http://www.irs.gov/pub/irs-pdf/f14157.pdf
Posted by: notary12 | March 11, 2013 12:23 PM
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I think that it is very unfair to those of us that have passed the RTRP and the others out there goes scott-free. I know of several prepares that are grossly abusing the system(becoming wealthy) while I am struggling to stay afloat.
Posted by: shynyce1 | March 11, 2013 11:55 AM
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Without at least a valid RTRP process, any yahoo, even a disbarred EA can still continue to prepare, charge for and sign tax returns. The RTRP process should only be the beginning. The penalties for not signing a compensated tax return should be severe and enforced.
Posted by: theeshop | March 11, 2013 7:48 AM
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I am an Enrolled Agent in good standing.
In year 2010 and 2011 I worked for another EA who broke every rule in the book!
He would not even allow me to ask clients for information. He just reported whatever the client thought was relevant and would not allow much or any communication between the preparer and the client. That was his interpretation of "due diligence"! He also had a policy that a different preparer had to prepare each client's return than the one who prepared it the year before. That way they would find the previous year's mistakes and he could amend that tax return at a price based on a % of the refund, or a much higher amount than the original bill.
Due to this policy I found a lot of gross neglect in the continuity of information. Such as no one noticed that a Dr. that had been in business for several years and was making three or four mortgage payments on a few properties had never reported ANY income in all those years!
As a matter of fact he has consistently reported losses and had a N.O.L. carry over! When I got the file I noticed that a few of the properties that were rentals had been foreclosed on and he received three 1099C's. However no rental income had ever been reported in any previous years. I could not even see any edivence anywhere in any of his files that he even owned those properties.
When I questioned the client about it, he quit talking to us. He moved on to another accountant I guess. I wrote to the Director of practice to confirm that this guy was in good standing and he was! He had been in business for over 10 years with about 10 employees practicing this way! In addition to that he had a fraudulent Workers Comp. poster displayed when he had in fact NO workers comp. insurance and he had never had any since he had been in business!
Unfortunately I was injured on the job and found out the hard way that this practice also made him sue proof! I was conseq- quently fired due to the injury and not paid for about half the work I did.
He also forced each employee to form a corporation when he hired them. He also made us pay him for forming the corporation. This way he could save a lot of payroll tax by passing it on to the employees. Even the receptionist owned a corporation! However he did not even do this correctly because he paid us minimum wage as W-2 employees and the rest was paid to our corporation!
He never paid overtime and no one was ever allowed to write overtime hours on their time sheet or even their desk calendar!
The last thing that I would like to share is that all the client's finished work was displayed in the foyer of the building and most of the work was NOT even put in envelopes or closed containers!
He was too cheap to provide envelopes to conceal the privacy for the finished work! Everybody that walked in the door could look at everybody else's tax and bookkeeping information complete with names, SS numbers and addresses.
Everything was on display for the whole world to walk in and view! Anybody could walk in and take anybody's information without anyone even seeing them.
This guy continues to practice in West Melbourne, Florida and I am waiting and hoping for the Director of Practice to do a surprise audit on him and raid his office! This company should not be in business leading all those thousands of cleints astray because they have to pay for it in the end.
Not to mention that the employees are being cheated and lied to.
This is a true story, and I had not been able to get any help from any government dept. that I reported him to or the Labor Board.
As far as I can tell the Labor Board in Florida does NOTHING for the workers. I don't even know why we have labor laws if no one enforces them.
No one cares! Nothing surprises me anymore.
I even have more horror stories about more unethical companies!
Denise Banton, EA license # 00040605 dbanton15@hotmail.com
Posted by: dbanton15@hotmail.com | March 8, 2013 6:34 PM
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