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Yvonne Caines is the Office Manager for a tax return preparation firm, True Tax Partners Inc. She just discovered by sheer happenstance that the two partners, Gwen Smith and Larry Joseph, have over a three$-$year period tax years $2021$ to $2023,$ been involved in a scheme to build loyalty among their clients.

The scheme was to file taxes for unsuspecting taxpayers by filling out fraudulent Schedule C forms, which showed a business loss and enabled the taxpayers to obtain the Earned Income Tax credit. By obtaining the Earned Income Tax credit, the taxpayers were able to receive refunds to which the taxpayers were not entitled. As a result, the taxpayers continued to come back to True Tax Partners Inc. every year. Several documents revealed that True Tax Partners Inc. did not provide the tax returns to the taxpayers to review or review the tax returns with the taxpayers prior to filing them with the IRS.

During the three$-$year period, True Tax Partners Inc. filed more than $3,600$ tax returns with the IRS, with only $1$ tax return resulting in a taxpayer owing money to the IRS. For each tax return True Tax Partners Inc. charged the taxpayer approximately $$400,$ resulting in True Tax Partners Inc. receiving more than $$1\mathrm{.}2$ million in tax preparation fees. In $2023,$ Gwen Smith claimed income from True Tax Partners of approximately $$394,000$ but due to a fraudulent Schedule C$,$ which claimed expenses of $$379,000$ on her tax return, she was able to qualify for the Earned Income Tax Credit and receive a refund of $$6,375.1.$Discuss the main issues in the case and the legal implications of the actions of the two partners.

$2.$ What recommendations would you make to Yvonne Caines who has stumbled across the scheme?

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