On October 16, 2009, William “Billy” Ankomah was convicted of one charge of fraud over $5,000. He was sentenced to two years of house arrest and was fined $50,000. For a fee, Mr. Ankomah fraudulently overstated donations on his client’s income tax returns to decrease their tax liabilities. In total, Mr. Ankomah overstated over $300,000 in charitable deductions.
Mr. Ankomah’s scheme is a common example of tax preparer fraud, whereby the tax preparer receives an additional fee to decrease their client’s tax liability. This scheme, as well as other tax preparer fraud schemes, is very common. The Canada Revenue Agency (CRA) is actively investigating other cases of tax preparer fraud as part of its “Project Trident” program.
If you think you are the victim of such a scheme, you should review your income tax returns to see if the deductions claimed by your tax preparer match what you actually incurred. If there is a discrepancy and you have not been contacted by CRA, you can file a voluntary disclosure to eliminate or reduce penalties and interest.