For years, I have relied on my accountant to fill out my taxes. Now he's in prison for fraud, and the IRS is holding me responsible for a decades' worth of back taxes. What can I do?

Not a whole lot, unfortunately, though a good tax lawyer may be able to ameliorate the situation slightly. The fact is during those ten years when your trusted accountant was filing your yearly tax returns, you were the one ultimately responsible; after all, you still had to sign off on the returns, and you presumably examined their contents before doing so.

What's more, you probably should have been aware you were paying a lower percentage of taxes than other people in your bracket, and at some point the IRS may presume you were in on the scheme, rather than its innocent victim.

For an analogous situation, look at all those people who invested their money with Bernie Madoff. Consistent annual hedge-fund returns of 20 percent, year after year, are far from the industry norm, and as far as the government is concerned, these lucky investors should have realized an active fraud was being perpetrated (or, at least, that something wasn't quite right and they should have extracted their capital and put it somewhere else).

Of course, it is possible you were completely innocent of your accountant's shenanigans, and had no idea he was operating outside of the law. The IRS still won't care; the government has to collect its back taxes and penalties from someone, and if your accountant is in jail, that means they've already “thrown the book” at him and are actively searching for other targets.

Want to know more? Contact the Oklahoma tax professionals at Travis W. Watkins, PC (800-721-7054) to learn what we can do for you!