Tax Office Steps-Up Compliance Initiatives to Protect Taxpayers and District Revenues

(Washington, DC) The Office of Tax and Revenue (OTR) has stepped-up its compliance initiatives to protect District residents from unscrupulous tax preparers and tax cheats who do not pay their fair share of taxes.

Tax Preparer Penalty

OTR has begun to assess preparers a penalty of $1,000 for each false individual return prepared for their clients, when evidence of inflated personal or business expenses, falsified deductions, unallowable credits, or excessive exemptions are found. A $10,000 penalty is assessed for every false corporate return.

“We are aggressively pursuing individuals and tax preparers for tax evasion, fraud or misrepresentation,” said Deputy Chief Financial Officer Sherryl Hobbs Newman. “Tax collection is the main source of revenue for the District. This type of behavior will not be tolerated.”

This effort comes on the heels of a joint investigation with OTR and the US Attorney’s Office, in which two tax preparers were recently indicted on defrauding the District and the Internal Revenue Service in excess of $1 million in fraudulent deductions and credits on District and federal returns.

Business Tax Prosecutions