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Houston Tax Preparer Sentenced for Fraudulent Returns
A Houston tax preparer has been sentenced for aiding and assisting in the preparation and filing of false income tax returns, announced U.S. Attorney Alamdar S. Hamdani. Krystal Wright pleaded guilty on April 17.
U.S. District Judge Jeffrey V. Brown has ordered Wright to serve 24 months in federal prison, followed by one year of supervised release. Additionally, she was ordered to pay $525,404 in restitution. During the hearing, the court reviewed her criminal history, the duration of her scheme, and the resulting harm to taxpayers, concluding that a prison sentence was warranted. The court expressed hope that Wright would learn from her actions.
Wright was the sole proprietor and only tax preparer at WW2F in Freeport for six years. Most of her clients did not own businesses or discuss any business-related income or expenses with her. After completing a tax return, Wright did not review the documents with her clients and only provided them with the refund amount and the first two pages of the return. This practice prevented her clients from identifying overstated or false items on their tax returns.
Between 2017 and 2020, Wright prepared and filed approximately 83 federal income tax returns containing false and fraudulent items. These included qualified solar electric property costs, charitable contributions, business expenses, wages, salaries, tips, and supplies. The fraudulent filings resulted in a total sustained tax harm of $525,404.
Wright will remain in custody pending her transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The IRS Criminal Investigation (IRS-CI) conducted the investigation. Assistant U.S. Attorneys Rodolfo Ramirez and James Hu prosecuted the case. IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft, and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, and they maintain a federal conviction rate exceeding 90 percent. The agency has 20 field offices located across the United States and 12 attaché posts abroad.
IRS Patrol: IRS Issues Guidance Explaining 2011 Changes to Flexible Spending Arrangements
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WASHINGTON — The Internal Revenue Service today issued guidance reflecting statutory changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangements (FSAs), to pay for over-the-counter medicines and drugs.
The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements (HRAs). Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan.
A similar rule goes into effect on Jan. 1, 2011 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs).
Employers and employees should take these changes into account as they make health benefit decisions for 2011.
For details on current rules, see Publication 969 , Health Savings Accounts and Other Tax-Favored Health Plans.
Updates on this and other health care reform provisions can be found on the Affordable Care Act page on IRS.gov. Notice 2010-59 and Revenue Ruling 2010-23, posted today, further explains this change.
Related Articles
- IRS Health Savings Accounts (HSAs) – Eligibility and Rules (personal-tax-planning.suite101.com)
- The California Endowment Launches Statewide Effort to Educate Californians About the Benefits of the Health Care Law (eon.businesswire.com)
- Sebelius Announces 1 Million Medicare Beneficiaries Have Received Prescription Drug Cost Relief Under The Affordable Care Act (medicalnewstoday.com)
- Patient Money: High-Deductible Plans Grow, but Not Everyone Should Get on Board (nytimes.com)
- 16.6 million small business employees could benefit from ACA provisions starting this year (eurekalert.org)
- An Unexpected Answer on the Affordable Care Act & the Deficit (whitehouse.gov)
- Podcast interview: Impact of health reform on Flexible Spending Accounts (healthbusinessblog.com)
- Nearly 2,000 Employers and Unions Approved into New Affordable Care Act Program (nlm.nih.gov)
- Koch Industries Slaps Health Care Law With One Hand While Holding the Other Hand Out (crooksandliars.com)
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