Take a look.

[Peachie]

Good afternoon,

I tried to include a link for this but was unable to: IR-2013-27: Enrolled Agent Disbarred for Stealing a Client’s Tax Payments and Preparing Returns with False Deductions.

Hope you are able to read this. I hope this gives enough info for you to view the text. I received this from the IRS delivery service.

Peachie

[Peachie]

Here's a copy/paste version.

Enrolled Agent Disbarred for Stealing a Client’s Tax Payments and Preparing Returns with False Deductions

WASHINGTON — The Internal Revenue Service today announced that its Office of Professional Responsibility (OPR) obtained the disbarment of enrolled agent Lorna M. Walker for stealing a client's tax payments and for preparing tax returns with false deductions for multiple clients.

Walker's enrolled agent status and her ability to prepare federal tax returns were revoked for at least five years. Walker practiced in the Seattle area.

“Practitioners who disregard their responsibilities to the tax system and their clients can expect to hear from OPR," said Karen L. Hawkins, director of OPR. "Any tax professional who steals from a client or causes them undue tax problems is unfit to practice before this agency."

In a Final Agency Decision, the Administrative Law Judge (ALJ) disbarred Walker for misappropriating client payments intended for the IRS in furtherance of an offer in compromise, and for preparing multiple returns containing Schedule C deductions for which she could not produce substantiation on audit.

Walker was engaged to represent a taxpayer in a collection matter. The client gave Walker two money orders totaling $1,500 to forward to the IRS along with an offer in compromise for delinquent taxes. It was found by the ALJ that Walker altered, endorsed and cashed the money orders for her own personal use, which are acts of willful incompetent and disreputable conduct under Circular 230.

The ALJ also found that Walker prepared Forms 1040 for seven clients claiming Schedule C deductions that were unsubstantiated and unsupportable. It was found that Walker failed to exercise due diligence in preparing the Schedule C’s thereby violating multiple due diligence provisions contained in Circular 230.

Walker also failed to respond to the administrative complaint and the motion for default judgment. The ALJ determined that because Walker failed to respond either to the complaint or to the motion for default judgment, she was deemed to admit all the allegations in the complaint, and to not oppose the default motion.

The text of the ALJ Decision can be found on IRS.gov

[ChEAr$]

I commented on the Facebook Tax Pro group that it is rare to fine an EA disbarred. In order of frequency, they are attorneys, then cpa's, then EA's last.

[taxxcpa]

That could be because there are more things CPAs can get disbarred for.

Every time I get an update from the TX State Board, I see there are CPAs having their certificate revoked for various reasons. Failure to pay fees, failure to get the required CPE , or performing an audit improperly are the main reasons.

One guy lost his certificate because he pulled a gun on a client.

Some of them misappropriated funds entrusted to them.

[joanmcq]

Add practicing outside your area of expertise. I always read the CA discipliary actions in my quarterly bulletin too. Once I found someone I know in there; had his certificate revoked after having had it suspended once before. Same issues: improper audits.

[Snaggletooth]

CPA disbarments

If the frequency of disbarments lists CPAs ahead of EAs, I wonder if it is apples-to-apples comparison.

An EA, for example, can get barred for Cir 230 violations, but most likely for sleazy moral actions which
have nothing to do with Cir 230. In addition to Cir 230 violations, there are a number of disbarment
actions taken by the AICPA which are over and above taxation matters. And all three groups (EAs, CPAs,
Attorneys) can be disbarred for sleazy moral actions such as fraud, theft, embezzlement, breach of trust,
etc.

It is sad indeed to compare these professional groups as if they were in a horse race, vying for Champion
of the Shifty-eyed.

[Bees Knees]

Maybe more CPAs get disbarred than EAs because there are more CPAs in this country than EAs. There are dishonest people in every profession, so it only makes sense that the group with the larger membership would also have more dishonest people infecting their ranks.

[taxxcpa]

The REALLY big-time fraud is by people who are both attorneys and CPAs.

Tax Attorney CPA Sentenced to 8 Years for Massive Tax Fraud Scheme

Former Jenkens & Gilchrist lawyer Donna Guerin was sentenced to eight years in prison and ordered to pay $190 million for her role in what the U.S. called the biggest tax fraud in history.

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