An Alaskan tax preparer has been charged with six counts of preparing false income tax returns for clients whose main business was selling illegal drugs.
Rebecca Renae Powell, a resident of Wasilla, Alaska (coincidentally the same home town as former Governor Sarah Palin), allegedly began preparing tax returns in 2007 for a friend who sold marijuana. Because the drug income was not reported, Powell’s friend was allegedly able to claim the Earned Income Credit for tax years 2003 through 2007, according to prosecutors.
Beginning in approximately October 2007, Powell also allegedly began preparing false individual income tax returns for a second individual who earned income by selling illegal substances, namely marijuana and heroin. To conceal the dealer’s illegal sources of income, Powell created the appearance that the income derived from the individual’s legitimate businesses instead of the sale of narcotics. In addition to preparing the false tax returns, Powell also allegedly created false invoices, bills of sale and other documents designed to substantiate the fabricated figures on the returns in case an audit or other inquiry occurred.
Each charge of preparing false tax returns carries a maximum possible sentence of three years in prison, a $250,000 fine, or both, together with the costs of prosecution.
13 Comments
Marykayf... Helpful in what regard? Added absolutely nothing to the message of the story.
Posted by: RAROBBEL | April 20, 2012 3:21 PM
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Can we bring up the Presidents name, every time there's a drug crime in Chicago?
Posted by: edwalton96 | April 20, 2012 7:45 AM
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When I saw the name of the town in Alaska, I was thinking tht it sounded familiar. The conincidentally phrase was helpful for me; I didn't think it cast any aspersions on Ms. Palin.
Posted by: marykayf | April 19, 2012 5:55 PM
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To make reference to the tax preparers home town as being the same as Sarah Palin's detracts from the story. SO WHAT? I've been to Wasilla and it is also the hometown of many other people. Obviously the author of the story is a left wing loon and got their jollies by referencing Palin. Get a life!
Posted by: RAROBBEL | April 19, 2012 3:04 PM
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I wonder if that Alaskan tax preparer also realized that IRC Section 280E also bars the deduction of any expenses associated with the selling of a controlled substance. That was a subject of discussion at the ClientWhys fall tax update seminar last year. The Feds have been using the old code section to go after California medical marijuana dispensaries that are legal under California law but not under Federal law.
Lee T. Reams, EA
Posted by: leereams | April 19, 2012 1:22 PM
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Would it be okay if the writer had said, . . . Wasilla, Alaska (whose other claim to fame is being the home town of former Governor Sarah Palin) . . . ????
I think that is what was intended. Most of the time we use the word "coincidentally" in nonscientific speaking to denote a trivial or interesting but otherwise unrelated attribute.
Posted by: KENNETH A | April 19, 2012 12:35 PM
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My question is..... let's say he does the right thing and reported the income from illegal drug selling. Does the preparer have an obligation to turn the taxpayer into the law enforcement authorities? Can he even do this tax payer's tax return correctly according to the rules and ethics conduct mandated for EA's, CPA's and Lawyers? Could the tax preparer create (legally) the necessary 1099's to the people the taxpayer purchased the drugs from?
Posted by: ARackson | April 19, 2012 12:35 PM
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I guess someone forgot the first rule in Tax Code "All income is taxable unless it is specifically excluded"
I guess more regulation by the feds is necessary
Posted by: cactusnboots | April 19, 2012 11:01 AM
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I am curious. Was the return preparer an enrolled agent, CPA, tax attorney or just an unlicensed preparer? That is the trouble in this country with the loose rules and regulations surrounding the earned income credit. The credit is there to benefit those less fortunate but more times than not it seems to be abused by those who work under the table with cash income or illegal income and then take tax dollars from law abiding tax paying citizens to pay for the tax cheats and crooks in this country.
Posted by: FAApilotCPA | April 19, 2012 10:44 AM
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Your reference to Sarah Palin is tired and juvenile.
Posted by: vmjimcross | April 19, 2012 10:38 AM
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Should have done a cost of living audit and reported income under as a one line item "Sullivan vs US". Filed returns for about four individuals for about a five year period and none were ever aufited
Posted by: taxzero | April 19, 2012 10:23 AM
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How does "(coincidentally the same home town as former Governor Sarah Palin)" belong in this story? Would you insert the same thing for anything illegal drug and/or tax dodging related that happens in any other politician's hometown?
Posted by: MarieS2 | April 19, 2012 10:17 AM
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What happens to the "clients"? will they be charged with filing false returns? Who determined they were selling illegal drugs in the first place? Were/will they be prosecuted for that?
Posted by: markwms | April 18, 2012 7:07 PM
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