In January 2013 Illinois Attorney General Lisa Madigan announced guilty pleas by two Chicago area accountants who engaged in a scheme to falsify sales figures on Illinois sales tax returns resulting in under reporting $5,000,000.00 in sales tax from various Chicago area gas station owners.
The Illinois Attorney General has been active in recent years in investigating sales tax fraud by gas station owners. There is nothing in the Attorney General’s announcement that indicates this is the end and in fact quite the opposite. Reading between the lines of the Illinois Attorney General’s announcement could easily lead one to believe there is “more to come” with fraudulent gas station sales tax returns.
Of particular interest to gas station owners are 21 seemingly harmless words toward the end of the announcement that reads: “they continue to cooperate with authorities in the ongoing investigations and prosecutions of gas stations and other clients that underreported sales”.
I read this as a warning to gas station owners and more broadly to retailers in general that to put it mildly “extremely aggressive accountants preparing incorrect sales tax returns could someday turn on their gas station owner clients in order to reduce the consequences of their own criminal actions.” When that happens it is not a good day for the gas station owner.
Having a good accountant is important. Having too good of an accountant could someday cause your downfall. If that day ever comes to you it will not be a good day.
When gas station owners come to us in this situation very often they are in one of two situations. Either they handed everything to their accountant and “let him/her handle it” without looking carefully at the results. Alternatively the gas station owner has at least some inkling that the numbers are less than accurate. Our representation strategy differs depending upon the gas station owner’s level of knowledge of the inaccuracies.
For more information on sales tax audits, tax fraud, or other criminal or civil tax law concerns, contact Horowitz Law Offices.