Thursday, April 19, 2012
Tax Preparer Omitted Marijuana Sales from Returns
Rebecca Renae Powell, a resident of Wasilla, Alaska (coincidentally the same home town as former Governor Sarah Palin), allegedly began preparing tax returns in 2007 for a friend who sold marijuana. Because the drug income was not reported, Powell’s friend was allegedly able to claim the Earned Income Credit for tax years 2003 through 2007, according to prosecutors.
Beginning in approximately October 2007, Powell also allegedly began preparing false individual income tax returns for a second individual who earned income by selling illegal substances, namely marijuana and heroin. To conceal the dealer’s illegal sources of income, Powell created the appearance that the income derived from the individual’s legitimate businesses instead of the sale of narcotics. In addition to preparing the false tax returns, Powell also allegedly created false invoices, bills of sale and other documents designed to substantiate the fabricated figures on the returns in case an audit or other inquiry occurred.
Each charge of preparing false tax returns carries a maximum possible sentence of three years in prison, a $250,000 fine, or both, together with the costs of prosecution.
BY MICHAEL COHN, ACCOUNTING TODAY