Tax Preparer’s Prison Sentence Reminds California Taxpayers to Comply With Internal Revenue Code

A tax preparer was recently sentenced to serve time behind bars in connection with a number of fraudulent tax returns she apparently filed in 2008 on behalf of herself and a number of other individuals. The 32-year-old woman was reportedly indicted by a grand jury on five counts of refund fraud and one count of making a false federal tax return. According to United States Attorney Joyce White Vance, the woman committed the fraud at a tax preparation company she jointly operated with her sister. As part of her scheme, the woman apparently claimed a first-time homebuyer credit on behalf of several individuals who were not eligible for the write-off.

Following her conviction, the woman was sentenced to serve six months in prison followed by six months under house arrest. She was also ordered to pay almost $57,000 in restitution. Earlier this year, the woman’s sister, who was also a co-corker at the tax preparation business, was convicted on two counts of preparing fraudulent federal tax returns as well as one count of making a false return. The 35-year-old is currently awaiting sentencing in the criminal case.

As part of a plea deal, both women admitted to artificially inflating their customers’ tax refunds. In addition to illegally claiming the first-time homebuyer credit, the women stated they deducted itemized expenses their clients did not provide them with documentation for and knew the taxpayers were not entitled to receive. The women also apparently helped customers purchase and sell dependents in violation of the tax code.

Vance stated behavior like that of the convicted woman is tantamount to stealing from honest U.S. taxpayers. A representative for the Internal Revenue Service Criminal Investigation Division said the agency has a zero tolerance policy towards refund fraud. She added that anyone who plays a role in such acts will be investigated and prosecuted to the fullest extent of the law.

Tax evasion is one of the most common tax crimes perpetrated in the U.S. In general, tax fraud includes inaccurately reporting your income tax obligation, underpaying your taxes, or failing to remit any taxes that are due. The penalty for violating the nation’s tax laws can be significant. As occurred in this situation, a U.S. taxpayer who is convicted of tax fraud may face significant fines and prison time. The IRS may also seize a taxpayer’s bank accounts and other assets.

Typically, most tax crimes are investigated following an IRS audit. If you are being audited by the IRS, you should discuss your situation with a hardworking tax attorney who can help you protect your financial interests. Certified tax law specialist William Hartsock has decades of experience representing clients in San Diego who were accused of tax fraud and other tax-related crimes. To speak with a veteran tax lawyer, do not hesitate to call Mr. Hartsock today at (858) 481-4844 or contact him through his website.

Additional Resources:

Trussville tax preparer sentenced to 1 year in custody for tax fraud, by Gary Lloyd, trussvilletribune.com

Photo Credit: cohdra, MorgueFile