IRS fires its annual warning shot: Don't cheat!


The Atlanta Journal-Constitution
Published on: 04/11/08

It's an annual April event.

As the deadline approaches for filing tax returns, the Internal Revenue Service and federal prosecutors fired a warning shot Friday in the form of a news release detailing recent cases of tax fraud and tax evasion charges and prosecutions.

Recent headlines:

   • Metro and state news

Just in case anyone was thinking about it.

"It's important that people believe the law is being enforced. Otherwise, if you're not enforcing the law, you're punishing the people who are honest. It's sending a message, showing deterrence," said Kelly McCutchen, executive vice president of the Georgia Public Policy Foundation.

Groups that serve as watchdogs or advocate tax reform are adamant that intentional lawbreakers should be punished, but they say many people simply make honest mistakes.

The annual warnings, said Pete Sepp of the National Taxpayers Union, are "the equivalent of a police officer with a speed gun ... trying to get people to slow down. These are probably unnecessary, given the fear most people have of the IRS."

Ryan Ellis, director of tax policy for Americans for Tax Reform, quoted his mother-in-law in describing the annual warnings as "teachable moments."

"It's Christmas, you ask for money for the poor. It's Easter, candy. And it's tax time, you remind people [to file honest tax returns]," Ellis said.

"You can't have a tax system with rampant fraud and abuse," Ellis said. "But you wouldn't need so much of an enforcement arm if we had a lower tax rates, if we had a system without so many loopholes."

On Friday, the IRS and the U.S. Attorney's Office in Atlanta provided 15 examples of people recently caught violating federal tax laws. Four of were cases in which indictments were returned this week. Two were resolved last fall.

The heading on the news release from U.S. Attorney David Nahmias was "As April 15 tax deadline approaches, more federal prosecutions send message that tax fraud can mean prison time."

IRS Criminal Investigations Special Agent In Charge Rebecca Sparkman said, "Taxpayers who might be thinking about cheating should think twice or suffer the consequences."

Fulton and DeKalb County residents and businesses with damage from last month's tornados have until May 19 to file tax returns. All others have until Tuesday.

Nahmias' examples include:

Jerry Lahr, formerly of Duluth; Jacqueline Demer of Gainesville; and Daniel Edward Turner of Cumming, all charged this week with hiding income. Laredo Michael Simpson of Lithonia was sentenced Nov. 20 to 3 years 5 months in prison for using fake W-2 forms to file tax returns.

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