A Southern California tax preparer has pleaded guilty to tax charges, admitting that he caused a tax loss to the government of $7,982,043 for tax years 2003 to 2009 by inflating the amount of mortgage interest on his clients’ tax returns.
Mario Placencia, 70, who worked in Montebello, Calif., admitted in his plea agreement that he intentionally falsified the federal tax returns of numerous clients by using numbers that he made up for the home mortgage interest they claimed so he could obtain refunds for the clients that he knew they were not entitled to receive.
Some of Placencia’s clients received notices of audits for tax years 2004, 2005 and 2006. During those audits, Placencia provided the IRS with false documents so he could convince auditors that his clients had incurred expenses that he knew they had not incurred and were entitled to deductions that Placencia knew had been fabricated.
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Placencia admitted that for two of his audited clients, he sent a letter on their behalf to an IRS office, enclosing a Form 1098 in the name of L.A. Great American Mortgage falsely stating that the clients had paid $19,876.23 in home mortgage interest and $5,182.17 in real estate taxes. According to prosecutors, Placencia knew that the L.A. Great American Mortgage Form 1098 was false. He admitted in the plea agreement that he had typed the Form 1098 using a blank form and numbers which he had made up.
Placencia faces up to nine years in federal prison and fines of $750,000 or more. In his guilty plea, he agreed that if ordered by the court, he would make restitution to the U.S. government for up to $5 million in partial compensation for the losses. Placencia also agreed to file amended personal tax returns for himself for tax years 2005-2009, correctly reporting all of the unreported income he had received and correcting any of the improper deductions or expenses he had taken.
He also agreed to the entry of a binding civil injunction that would bar him for life from aiding in the preparation of tax returns for anyone other than himself and his wife, and barring him from representing other individuals before the IRS.
U.S. District Judge S. James Otero ordered Placencia to appear for sentencing on Nov. 14.
5 Comments
how come this guy gets 9 years for defrauding the gov't to a,most 8 million but on the other case where another preparer filed false returns amounting to 5.6 mil: the difference is that the latter was a woman who claimed 19 children born to her on the same day which shows that the gov't doesn't want to be that gullible.
Posted by: gerardotax | August 17, 2011 9:21 PM
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The DOJ needs to increase the jail time for crimes such as this to about 20 years minimum, with no time off for good behavior. Individuals such as this guy undermine the voluntary tax system will have in this country by their dishonest actions. Also full restitution should not be an option but a requirement for all the underpaid taxes, penalties and interest. The age of the tax preparer should not be a factor in the sentencing phase of the case. Most tax professionals are honest and upright but characters like this gives the tax preparation professional a very dark eye.
CPA/August 2, 2011
Posted by: cpapilot9 | August 2, 2011 1:28 PM
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Don't blame the IRS for this. Not all mortgage companies file Form 1098s properly with the IRS. Way too many times, information returns provided to a client vary from what IRS records show. And that is besides the usual mess-ups with Social Security numbers.
Posted by: EnrolledAgent | August 1, 2011 10:49 AM
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Slap on the wrist. At 70, he's actuarily unlikely to complete 9 years. With all the write-downs under the federal sentencing guidelines, he'll probably get more like 2 years and 8 months and then get released early for "good behavior." What's the deal with "he agreed that if ordered" instead of "he agreed that he will make restitution." After all, this was our money he stole and increased our national debt.
Posted by: EnrolledAgent | August 1, 2011 10:45 AM
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Is this story true. No one found out about this for 5 years. If the e-file system was populated with the mortgage interest and property tax sooner this would have never happened. IRS stop blaming others...
Posted by: JDAVIS | August 1, 2011 10:22 AM
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