Beware of Fraudulent Tax Return Preparers Debbie Foister


Rodney C. Smith will serve up to 41 months in prison followed by one year of supervised release for his willful preparation of false tax returns through his tax preparation business. In 2020, the IRS executed a search warrant at Mr. Smith’s business, Xpert Tax Services, in Milwaukee, Wis. At that time, Mr. Smith admitted to IRS agents that he was knowingly violating federal tax laws. (Mr. Smith had been convicted in 2010 of conspiracy to defraud the United States by filing a false tax return.) Mr. Smith defiantly continued to prepare false tax returns for his clients in 2021. Eventually, in October 2023, Mr. Smith pleaded guilty to four counts of aiding, assisting, counseling, or advising the preparation of a false return.

The fraudulent preparation of tax returns included false representations about the client’s dependents, wages, and profits or losses from businesses. The misrepresentations resulted in the taxpayer receiving a refundable earned income tax credit they were not eligible for, hence the receipt of an inflated income tax refund. The estimated loss associated with the preparation scheme was $3.3 million.

Mr. Smith willfully, repeatedly, and fraudulently fabricated income tax returns for the purpose of maximizing his client’s income tax refund. Tax preparers are entrusted to file an accurate income tax return for their clients. Tax preparers are required to be ethical in the preparation of a tax return. When a tax preparer commits such crimes, it is stealing from the government and at the same time betraying the confidence of their clients.

Most preparers are ethical; however, like any other service sector, there are some dishonest preparers who file false and fraudulent tax returns and ultimately defraud their clients. Taxpayers should be cautious when choosing a tax preparer as well as when signing their income tax returns. Understand that as the taxpayer, you are ultimately responsible for all the information reported in your tax return. And remember the adage: “If it sounds too good to be true, it probably is.”