Case in Point

Tax preparers gone wild

The ballad of Bonnie G. and Donnie Z., part 1 of 2

Only four U.S. states — California, Oregon, Maryland and New York — regulate independent tax preparers. Many preparers are reputable CPAs, lawyers or IRS-certified "enrolled agents." But many just hang up their "We do taxes!" signs and are in business.

Many naïve taxpayers — who believe that all tax preparers have to be certified, licensed or regulated in some way — place their entire trust in supposed experts to handle one of the most serious dimensions of adult life.

Regulations can include requirements to demonstrate subject matter knowledge and to disclose prior criminal convictions, and they remind practitioners that authorities are watching their conduct.

So, lack of regulation creates a Wild West for tax preparers who are incompetent or dishonest or both. And that's where we meet Bonnie G. and Donnie Z.

Bonnie and Donnie, whose separate cases I encountered in my former job, were two corrupt tax preparers with long and exotic résumés, tenuous relationships to the truth, basement offices and easy access to unsuspecting clients who needed individual and business tax returns prepared. In this two-part column, we'll examine where each of these crooked tax preparers came from, how they defrauded their clients, and the dollars lost and misery found because of their respective yearslong crimes.

In this issue, we'll highlight the fabulous Bonnie G.

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