With tax season now underway, officials with IRS-Criminal Investigation and the U.S. Attorney’s Office in New Jersey are warning taxpayers to beware of tax fraud from tax preparers.
U.S. Attorney Paul J. Fishman and IRS-Criminal Investigation special agent-in-charge Shantelle P. Kitchen, Newark Field Office, are reminding New Jersey taxpayers about the importance of filing complete and accurate tax returns by the April 15 deadline.
They also urged those who are hiring someone else to prepare their returns to be careful when choosing a professional tax preparer.
“Many taxpayers appropriately hire somebody to prepare their tax returns for them,” Fishman said in a statement. “Given the importance of filing an accurate and timely tax return, this is a decision that should be made carefully. You should choose a return preparer with the same diligence you would use in selecting a doctor or a lawyer.”
“While the vast majority of return preparers are professional, honest and provide a valuable service to their clients, there are some who are not,” Kitchen said, highlighting two recent cases of return preparers who pleaded guilty to preparing false tax returns for clients:
Sean Gunby, of Jersey City, pleaded guilty Dec. 16, 2013, to one count of aiding and assisting in the preparation of false tax returns. Gunby was the sole owner and operator of Gunby Consulting Inc. and Gunby Consulting Group., Gunby admitted that for the tax years 2006 through 2010 he prepared false tax returns for his clients by fabricating and inflating certain expenses, deductions and credits on Schedules A, C, D and E, of his clients personal tax returns. By falsifying this information, Gunby was able to obtain tax refunds for his clients greater than those they were lawfully entitled to receive. The total amount of tax the IRS was defrauded of as a result of the fraudulent returns prepared by Gunby is $84,559. Gunby faces a maximum prison sentence of three years when he is sentenced on April 4.
Carlyle Frasier, of Maplewood, N.J., owner of Fraser CPA and Taxko Inc., a tax preparation business, pleaded guilty Jan. 28, 2014, before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of aiding and assisting in the preparation of false individual income tax returns. From 2008 through 2011, Fraser prepared and filed false individual income tax returns for his clients. On April 8, 2011, Fraser prepared a false 2010 individual income tax return for an undercover agent, which claimed false deductions for medical and dental expenses, charitable contributions, unreimbursed employee expenses, tuition, a business loss, and a capital gains loss. In preparing false individual income tax returns for his clients, Fraser caused a tax loss to the IRS of $149,739. Frasier faces a maximum prison sentence of three years when he is sentenced on June 25, 2014.
“Tax violations have been erroneously referred to as victimless crimes, but it’s the honest law-abiding citizen who is harmed when someone tries to cheat our nation’s tax system,” Kitchen said.
“Our tax system depends on honest people filing returns that are complete and accurate,” U.S. Attorney Fishman said. “My office along with IRS-Criminal Investigation will investigate and prosecute those who violate our tax laws.”
Recent tax cases investigated by IRS-Criminal Investigation and prosecuted by the U.S. Attorney’s Office here in New Jersey include:
Amadeus Manata, of Warren, N.J., pleaded guilty Jan. 10, 2014, to an information charging him with one count of subscribing to false personal federal income tax returns. For the tax years 2005 through 2007, Manata filed U.S. individual income tax returns in which he claimed to report all of his income from his pizzeria, Pizza Pasta Etc., but which omitted $563,343 in cash he had diverted from the businesses for his personal use. Manata’s intentional failure to disclose true, correct and complete information to the IRS resulted in a tax loss to the United States of $190,712. Manata faces up to three years in prison when he is sentenced on April 16, 2014.
Rafael Holguin, of Rochelle Park, N.J., pleaded guilty Jan. 30, 2014, to an information charging him with one count of subscribing to a false corporate tax return for the 2008 calendar year. Holguin was the sole owner of Bronx Express Liquors. For the 2008 calendar year, Holguin signed and filed a false corporate tax return on behalf of Bronx Express Liquors. This return was false in that Holguin failed to include $391,831 of taxable income. In addition, Holguin admitted that he failed to report $513,744 of additional taxable income on the corporate tax returns for 2007 and 2009. Holguin’s intentional failure to report the additional taxable income for the years 2007, 2008 and 2009 resulted in a tax loss to the government of $388,876. Holguin faces up to three years in prison when he is sentenced on May 12, 2014.
IRS-Criminal Investigation is the law enforcement side of the IRS. Special agents investigate potential violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.