I browsing around the DOJ News section trying to get some data about child/human trafficking arrests/prosecutions to tie into a #SaveOurChildren/Tim Tebow FB post, and noticed a LOT of news about shutting down tax preparers in different states.
(Just an aside. We need to keep an eye on DOJ news better. There was a lot announced there that we aren't seeing anywhere.)
I would assume from the amount of news about them in different states that it was a coordinated roll-up. But why? Is there a bigger underlying story to this, e.g. no more tax preparers are going to be needed?
Here are just a few I found:
https://www.justice.gov/opa/pr/justice-department-seeks-shut-down-mississippi-return-preparer
Until they go after any Big 4 firms, I don't think the industry is in trouble. That's where the big fish go to evade taxes, because our country protects the Big 4 like they do the big banks. If you look at what's happening in Europe though, they're catching wind that Big 4 auditing practices are subject to corruption. They are the grease for multinational corporate machines
The accountant I use has told me about the way that some of those big tax preparers make the big money is by filing 2 returns. 1 return contains the basic tax rules, and the other maximizes any returns but they get the second check sent to themselves as extra profit.
I couldn't prove this is happening, however, if there was a scam to make in that system, that would be the type of thing to try.
I work for one of them, in an area of Tax. To me, it seems like audit has the biggest issues with corruption because it uses a hierarchy of decision-makers to either pass or "fail" an audit report (that's an oversimplified version but you get the idea).
In Tax, it's much harder to help big businesses evade taxes or hide illicit activities because they need to provide audited financials. So if things were hidden you need to look at who did the audit, not the taxes. For high net worth individuals/private companies/trusts/estates though, they do not use the audit process and a shady CPA can sign off on tax evasion/illicit use of money pretty easily. They even have legal defenses that leave liability on the taxpayer.
The most efficient way to destroy the tax preparation industry is to simplify the tax code to where any regular person can do it on their own. Im more than willing to lose my tax job if it means greater freedom for everyone.
Mississippi has a large number of minority population, every year at tax time they are lined up at Walmart to get their tax returns done so the can get their "refunds" . The state the minimum amount of income you can list without a W2 or 1099, and they all get multiple EIC tax credits. Depending on how many kids they claim this can total thousands of dollars. This is why they are cracking down on the preparers signing on fraudulent claims
I went back to the site after writing this post and the website has been updated. A couple months ago I realized that I could filter on human and child trafficking and see that the instances of arrests had increased dramatically in 2020/2021 from past years. I used that filter results to show my husband that multiple arrests were happening every day.
I can no longer filter on child trafficking and there are no longer lists of news articles about trafficking, even for late 2020/early 2021 (which I know I saw previously!) It may be that the filters were modified and a programming error is filtering them out, but I sense something weird here.