AG Settles With Idaho Tax Preparer Accused of False Tax Returns

BOISE (KTVB) -- A Blackfoot tax preparer accused of lying on tax forms he filed for customers in order to secure big returns has settled with the Attorney General's Office.

Jonathan Peirsol agreed to pay $80,000 to the Attorney General by June 30. The money will be used to reimburse customers who were forced to repay their refunds with interest to the government after audits revealed the discrepancies.

Peirsol, has denied that he made false promises to consumers or made untrue statements on their state tax filings. But Attorney General Lawrence Wasden says routinely inflated the amounts his clients had paid in charitable donations, medical expenses and more.

In 2011, one of Peirsol's clients handed in $2,225 in medical expense receipts, but their tax return claimed more than $24,000 in medical costs. Another customer turned over $6,258 in receipts, only to have the tax preparer claim more than $17,800 on the clients behalf, Wasden said.

"Idaho's consumer protection laws make it illegal for anyone who prepares taxes to make false promises to clients," Wasden said in a statement."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 Attorney General began an investigation into Peirsol's business in the fall of 2013 after the Idaho State Tax Commission audited returns from 70 customers who had paid up to $300 to file with the tax preparer between 2007 and 2013. The customers had been excited to receive large returns, but did not realize false information had been included on their taxes until they were audited Wasden said.

Sixty-seven of the 70 people audited had to return money to the IRS, paying interest on the refunds and in some cases, a penalty as well.

Wasden says $60,000 of the money Peirsol has agreed to pay back will be put into a trust fund and used to repay the customers who lost money. The rest of the settlement will go toward fines, fees and court costs. Peirsol will also be barred from preparing any more tax returns for clients unless supervised by a certified public accountant.

"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."