The clients of Silver Spring accountant Lawrence Sperling, 66, were looking for big refunds, but federal authorities say that Sperling was actually making up charities to scam the government.
Sperling was indicted in U.S. District Court in Greenbelt late Monday on 15 charges of aiding and assisting false income tax returns. He faces three years in prison and a fine of $250,000 for each charge.
Assistant U.S. Attorney General Nathan Hochman said the charges send a message that “those who prepare false and inflated tax returns – and those taxpayers who sign them – are hereby put on notice that they face having to pay back all their taxes with interest and civil penalties, as well as the loss of their liberty.”
Indeed, while Internal Revenue Service investigators said that at this point they’re not going after Sperling’s clients, it is their right to do so.
“Ultimately it is the individual responsibility of the taxpayer to review their return,” Deborah Trotter, an IRS criminal investigator, said, declining to comment on the specifics of Sperling’s case and why his clients won’t be prosecuted.
According to the indictment, Sperling, allegedly using false charitable gifts among other illegal deductions, was able to get his clients a total of $97,000 in tax refunds, a scheme he ran from 2002 to 2003 as the owner of American Tax Service. He also filed returns under the names American Tax Institute, JAMAR LLC and American Tax Professional Associates.
Trotter said some accountants have an incentive to boost refunds to retain clients, or line their own pockets by getting a cut a of the return.
Don Sort, acting special agent in charge of the IRS criminal investigation department, said most accountants do not skirt the law, but those who do “defraud the government, the taxpaying public and their own clients.”
Trotter’s advice to avoid prosecution: “Seek someone who is respectable; it’s like finding a doctor. And check over your return.”
