Duo charged with filing false returns

Federal officials are using the indictment of a Bountiful-based father and son team of tax preparers as a warning to be careful who you hire to prepare your returns.

Late Wednesday, a federal grand jury returned indictments against Lynne K. Mercer and his son, Lance Mercer, who operate Mercer Consulting Group in Bountiful. Both men face multiple counts of preparing false income tax returns between 1999 and 2002.

Lynne Mercer, a self-employed tax preparer who has prepared federal and state income tax returns since 1981, faces 14 felony counts of preparing false returns. Lance Mercer, in the business since 1999, faces 10 felony counts of filing false returns.

The indictments allege the pair used various methods to "reduce their clients' tax liabilities" including creating false deductions, claiming personal and non-deductible expenses as business expenses, and deducting expenses more than once on the same tax return. The two are also accused of shifting self-employment income to avoid self-employment tax.

Federal officials warned that although companies can be hired to do one's taxes, the customer is ultimately liable for fines and penalties if the tax return contains fraudulent information.

"At this time of year, when Utahns are preparing and filing tax returns, this case serves as a reminder to taxpayers to carefully review their returns before they sign them," said acting U.S. Attorney for Utah Stephen Sorenson. "Taxpayers who file a false return, even if they don't know it's false, can be subject to civil liability and ultimately will have to pay tax deficiencies and fines."

When contacted, Lynne Mercer said he was not aware of the indictments. "It would have been nice had they informed my attorney," he said. "I think we're innocent of the charges and we certainly will fight them."

A certified public accountant since 1973, Mercer said he has been helping people since that time and is concerned what the indictments mean to his business. Specifically, Mercer said he resents federal prosecutors for making an example of him during tax time.

"I think it's a little bit unfair," he said.

This is not the first time, however, that Mercer has run up against federal officials.

Court records show that in 1999 the Securities and Exchange Commission obtained a permanent court injunction against Lynne Mercer from dealing in any fraudulent scheme to buy, sell or trade securities. He was also fined more than $8,000.

If convicted on the current charges, both men face up to three years in federal prison and a $250,000 fine for each count.

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E-mail: gfattah@desnews.com