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Tuesday, November 12, 2019

MASSACHUSETTS ATTORNEY GENERAL'S OFFICE: Lowell Tax Preparer Permanently Barred from Doing Business After Defrauding Clients, Keeping Refunds

By Press release submission | Feb 18, 2019

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Massachusetts Attorney General's Office issued the following announcement on Feb. 13.

A Lowell tax preparer has been permanently barred from operating a tax preparation business and ordered to pay $483,000 following allegations that he defrauded clients by filing falsified tax returns and pocketed the inflated refunds, Attorney General Maura Healey announced. As Massachusetts residents begin preparing their taxes for the April deadline, the AG’s Office offers tips to those considering hiring a tax preparer.

A consent judgment, including the payment order and permanent injunction, was entered in Middlesex Superior Court against Samuel M. Dangaiso and his unregistered company Tax Enterprises.

“This defendant filed millions of dollars in fraudulent deductions on behalf of his clients and pocketed thousands of dollars based on their falsified tax returns,” said AG Healey. “This tax season, we ask members of the public to exercise caution and contact my office about any tax preparation scams.”

“The Department of Revenue takes seriously its obligation to investigate fraudulent activity to protect the Commonwealth’s taxpayers,” said Massachusetts Department of Revenue Commissioner Christopher Harding. “With tax filing season in full swing, this judgment is a timely reminder for taxpayers to be cautious when filing their returns and to carefully consider tax preparers’ qualifications before engaging their services.”

The AG’s Office sued Dangaiso and his company in February 2017 after an investigation conducted by the Massachusetts Department of Revenue (DOR) revealed that Dangaiso was engaged in serial tax fraud and unfair and deceptive business practices relating to personal income tax returns in Massachusetts.

According to the AG’s complaint, Dangaiso filed hundreds of tax returns containing inaccurate information, including unjustified deductions, false bank account information, and fake dependents, without the knowledge or consent of his clients. Dangaiso allegedly used these inaccurate tax returns to generate inflated tax refunds that he directed to his bank account or a prepaid debit card, transferring the amount his customer expected as a refund and keeping the remainder for himself. The AG’s complaint alleged Dangaiso kept at least $150,000 of the funds generated by this scheme.

During the course of the investigation, the AG’s Office secured a preliminary injunction barring Dangaiso from continuing to serve as a tax preparer while the lawsuit was ongoing. In January 2018, Dangaiso admitted to violating this injunction and was ordered by the court to pay $30,000.

The permanent injunction prohibits Dangaiso from preparing and submitting state tax returns for Massachusetts taxpayers and orders him to pay $483,000. Under the judgment, any state income tax refunds Dangaiso may be eligible to receive in the future will be used to pay back the clients he defrauded, and further violations of the order would automatically trigger additional sanctions.

The AG’s Office and Massachusetts Department of Revenue encourage taxpayers to consider the following tips this tax season when choosing a tax preparer:

Qualifications: Paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. Ask to see it along with proof of membership in a professional organization. Any history of disciplinary actions is available through the Better Business Bureau or the Massachusetts Board of Public Accountancy.

Service fees: Avoid those who charge a percentage of your refund or who claim they can obtain larger refunds than other preparers. Always make sure any refund due is sent to you or deposited into an account in your name. Do not have your refund deposited into a preparer’s bank account.

Filing methods: Paid preparers who file more than 10 returns to the IRS or Massachusetts Department of Revenue must file returns electronically. It is the safest method for processing returns and the quickest way to get a refund. Whether filing electronically or by paper, never sign a blank return. Before you sign your return, review it and ask questions. Make sure you understand everything and that you are comfortable with the accuracy of the return before you sign it.

Preparation: Good preparers will ask for your records and receipts and will also ask questions to report total income to get you the tax benefits that you are entitled to claim.

Signature: Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the signed return.

Original source can be found here.

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Massachusetts Attorney General's Office