A taxpayer recently found out the hard way that if something sounds too good to be true, get a second opinion. His San Francisco-based CPA helped him prepare and file tax returns that failed to report over $18 million in income between December 2007 and September 2013, which resulted in $4.7 million of unpaid tax liabilities. In this case, both the taxpayer and his CPA were indicted; the taxpayer entered into a plea agreement and the tax preparer took his chances --- he lost.
The CPA now faces up to nine years in prison, and the taxpayer could serve up to ten years in prison under his guilty plea. Both sentences may also include supervised release, restitution, and monetary penalties.
Remember, a taxpayer cannot delegate the duty to file an accurate tax return, nor can he hide behind a tax preparer to try to evade tax without consequences.