By Kiana WilburgCollecting tax revenue usually follows a system called the self-assessment system.?? This is where taxpayersChartered Accountant, Shawn Naughtonare allowed to compute their own tax charges yearly, relative to their income, allowances and reliefs.As taxpayers are not usually well-informed on the intricacies of this and other similar matters, many depend on the services of tax preparers (usually accountants and attorneys) in helping them self-assess. The taxpayer is always responsible for the self-assessment information which is then supplied to the Guyana Revenue Authority (GRA).In this article, the quirks of the self-assessment system will be examined and sharing his views on the subject in a recent interview was Chartered Accountant, Shawn Naughton.He explained that if the amount of taxes self-assessed is under that which should have been legally assessed, then serious implications can ensue. Naughton said that the worst case scenario is that the taxpayer could be penalized and may even face criminal prosecution for bad self-assessment returns. He said that this would be the case, whether or not the taxpayer used a tax return preparer to help him prepare his self-assessment return.The Chartered Accountant posited that effectively, the taxpayer could be defrauded by his return preparer, as he has to pay for the preparer’s services and may also have to pay for the preparer’s mistakes.He said that revenue could also be lost to the country if the underassessment goes undetected.While it is not desirable to make return preparers responsible for their clients’ tax return information, Naughton asserted that these persons need to take responsibility for the quality of services they provide.He highlighted that the ‘Offences’ section of Guyana’s Income Tax Act indicates that “every person without reasonable excuse who makes an incorrect return, makes an incorrect statement, or gives any incorrect information which is required by the Act, whether made on his own behalf or on behalf of another person shall, not withstanding anything to the contrary contained in the Act, be liable on summary conviction to a fine of G$15,000 and double the illegal tax benefit resulting from the infringement”.It also states that where the illegal tax benefit results from any person knowingly making false statements or false representations, whether on his own behalf or on behalf another person, the penalty is G$15,000, three times the illegal tax benefit and imprisonment for up to six months.Naughton pointed out that this can be significant especially to tax return preparers.“As an example, if my accountant submits an incorrect return on my behalf without reasonable excuse and this can be proven he will be liable on conviction.?? If the tax saved as a result of the incorrect return is G$1,Tony Gonzalez Falcons Jersey,000,000 the accountant would be penalized for G$2,000,000 plus G$15,000. This has nothing to do with my additional tax liability of G$1,000,000, which must still be paid by me,” he said.The Chartered Accountant added that when an accountant is found to be involved like this, all of his clients are usually seen as high risk to the revenue authority, which usually leads to tax audits on all of his clients.To support his case, he cited the case of Reginald B. Landrum, a USA tax return preparer, who pleaded guilty to one count of aiding in the preparation of false tax returns during a court hearing in 2013. Court records show that between 2006 and 2010 Landrum prepared and submitted to IRS 58 false tax returns using false information, resulting in larger tax refunds for his clients. The total tax loss associated with the 58 fraudulent tax returns Landrum prepared and filed was US$229,691. At sentencing, Landrum faced up to three years in prison and a US$250,000 fine. (https://www.justice.gov/usao-wdnc/pr/prison-time-and-stiff-penalties-await-tax-fraudsters-prosecutors-warn.)Naughton said that false statements and/or false representations are presumed to have been knowingly made whenever a certain degree of negligence is revealed.?? He stated that in his given example, if it could be proven that his accountant “knowingly” produced incorrect statements, as a result of the obvious level of his negligence, he would have been liable to G$30,000,000 plus G$150,000, in addition to having to serve jail time.Naughton said that where on investigation it has been found that a taxpayer has been assessed less tax than he should have been, that taxpayer would have to pay the additional taxes. He said that if it is found that the return was not prepared in good faith then the taxpayer may be additionally penalized.“Note that the taxpayer is usually prepared to testify against the preparer. This is because the taxpayer himself can face conviction if it cannot be proven that the preparer is the one responsible. Note that criminal proceedings agai