Houma CPA Facing Ban for Faking Tax Deductions

Maritime workers beware: A federal judge has slammed the brakes on Steven W. McCann, a certified public accountant in Houma, La., after he was caught falsely inflating tax deductions for his clients.

In what’s being called a landmark move against tax fraud, federal prosecutors have ordered McCann to stop claiming false employee expense deductions on federal income tax returns he prepares. According to documents filed by the feds, McCann prepared nearly 1,000 fraudulent returns for maritime workers, falsely stating that their employers paid for meals and other expenses when it was actually their own employers who covered them.

The government’s complaint asserts that McCann’s scheme exploited a common tax deduction designed for crew members at sea. But the feds say McCann never had his clients’ employers pay for these deductions, instead pocketing the supposed savings himself. In 2007, another CPA was banned from promoting a similar ploy by a federal court in Los Angeles.

“The IRS and federal prosecutors are dead set on shutting down anyone who tries to peddle this mariner’s tax deduction as valid,” said Nathan J. Hochman, Assistant Attorney General for the feds’ Tax Division. “Since 2001, we’ve obtained injunctions against over 365 tax preparers and fraudsters.”

Hochman extended his gratitude to trial attorney Grayson Hoffman and IRS revenue agent Phil Rampey for their work in securing the injunction.

McCann’s case is a stark reminder of the lengths some will go to game the system, putting honest taxpayers at risk. As the investigation continues, it seems the feds are determined to crack down on any who would undermine the integrity of our tax code.