Attorney General settles with E. Idaho man accused of making false statements on client tax returns
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BOISE -– Idaho Attorney General Lawrence Wasden has reached a settlement with an eastern Idaho businessman accused of making false statements on dozens of tax returns he prepared for clients.
A settlement approved by Fourth District Judge Jason Scott requires that Jonathan R. Peirsol, of Blackfoot, pay $80,000 to the Attorney General by June 30, according to a news release from the Attorney General’s office. The money will be used to reimburse clients who paid for Peirsol’s services and were ultimately audited by the Idaho State Tax Commission. The agreement also prohibits Peirsol from preparing any tax returns in the future without being supervised by a certified public accountant.
Peirsol was accused of making false promises to consumers about his knowledge and skill for obtaining large tax refunds and making untrue statements on state tax returns. Peirsol has denied the allegations.
“Idaho’s consumer protection laws make it illegal for anyone who prepares taxes to make false promises to clients,” Wasden said. “The relationship between client and the person hired to prepare and file tax returns must be based on trust, professionalism and adherence to the highest ethical standards.”
The investigation began in the fall of 2013 after the Tax Commission audited returns filed by 70 individuals who paid up to $300 for Peirsol’s tax preparation service. The audits revealed a series of inflated deductions and expenses on most of those returns, filed between 2007 and 2013.
Wasden said clients were initially pleased with the results and spent refunds. But after the inconsistencies were discovered in the audits, 67 clients were required to repay refunds with interest, and in some cases, pay a penalty.
Wasden said those clients were unaware of the errors and false statements, which in many cases involved thousands of dollars in overstated deductions for medical expenses, charitable contributions or investment interest.
In one case, a Peirsol client presented medical expense receipts for 2011 totaling $2,225, but their tax return claimed more than $24,000 in medical expenses. In a separate case, Peirsol claimed more than $17,800 for a client who turned over receipts totaling $6,258, according to Wasden.
Under terms of the deal, the Attorney General will place $60,000 in a trust account that will be used to pay restitution to harmed consumers.
“When tax season arrives again next year, I urge consumers to be cautious about anyone making tax refund promises that seem too good to be true,” Wasden said.
“Credit should also be given to State Tax Commission’s team of auditors responsible for identifying the discrepancies that will ultimately lead to consumers being reimbursed for the harm caused in this case,” Wasden said.