Considering Tax Credits for Landfill Production of Methane?

"Taxpayers need to choose their tax preparers carefully," said John DiCicco, acting assistant attorney general for the Justice Department's Tax Division. "They should be particularly alert when a tax preparer steers them toward a scheme that seems too good to be true."

DiCicco was referring specifically to an alleged $30 million scam between 2003 and 2006 in which four CPAs and 27 tax preparers "helped" their customers get the most for their money ─ based on fictitious methane production at landfills. According to Justice Department documents, the conspirators identified landfills in various locations throughout the United States and Puerto Rico from which they purported to secure rights to the methane gas, if any, generated by such landfills.

Robert Henry Anderson of Bloomington, Ill., claimed to be a professional engineer and created bogus engineering reports containing baseless findings that the landfills identified by conspirators qualified for fuel from non-conventional sources (FNS) tax credits. The conspirators then recruited a network of tax-return preparers to whom they promoted their tax-credit scheme. Conspirators provided to the preparers, who agreed to promote the tax-credit scheme to their individual taxpayer-clients, a computer software program which generated the amounts of the FNS tax credits to be claimed by the individual taxpayers as well as false and fictitious template documents to be used in support of the claimed tax credits. The individual taxpayers were then obligated to remit a substantial portion of refunds based on the claimed credits to the conspirators.

Anderson may see some jail time (5 years maximum) but most everyone else is being barred from promoting the alleged tax fraud scheme.

Does "barred" mean a person can still prepare taxes, just not this particular scheme? It seems as if too many people are getting off too easily. What do you think?

Check out this Web page for the IRS' 2010 scam alerts..

Posted by L.K. Williams, EPonline on Mar 22, 2010