As the April 15 deadline for filing taxes approaches, a federal prosecutor and the head of the IRS Criminal Investigation’s Newark Field Office are reminding taxpayers to accurately and completely fill out their returns and make sure they file them on time, while pointing out that not all tax preparers are honest.
“Tax evasion is a felony, punishable by prison time and heavy fines and penalties,” U.S. Attorney Paul J. Fishman said in a statement. “It’s important for the public to take time to carefully prepare their returns and make sure they file them—or seek a filing extension—before the deadline.”
“The prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system,” Acting SAC Kitchen said. “Year round efforts of IRS-Criminal Investigation are directed at that portion of Americans who willfully and intentionally violate their legal duty to voluntarily file lawful and accurate tax returns.”
Fishman warned taxpayers to be careful even if they hire a professional to prepare their taxes.
“Even if someone else prepares your return, you are ultimately responsible for all the information on it. Make sure you review your return, and never sign a blank form,” he said.
Shantelle P. Kitchen, the acting special agent in charge of IRS-Criminal Investigations’ Newark Field Office, noted several recent cases of New Jersey tax preparers who had committed crimes.
“While the vast majority of return preparers are professional, honest and provide a valuable service to their clients, there are some who are not,” she said.
Elijah Washington Jr., owned and operated a tax preparation business, Elijah’s Professional Tax Service, in Jersey City, where he prepared tax returns for tax years 2005 through 2008. He admitted that he fabricated various items to obtain larger refunds for clients, including tuition and fees deductions, child tax credits, charitable contributions and job expenses. He also failed to report his own income on the money he earned from the tax preparation business.
Other tax cases prosecuted recently by the U.S. Attorney’s office in New Jersey include:
Nicholas Papanier Sr., 57, of Sewell, N.J., pleaded guilty on March 22, 2013, to one count of tax evasion. Between 2006 and 2009, Papanier owned Nellie’s Provisions, a meat distribution company that provided all of the meat for Primo Hoagies franchises and other independent restaurants. In 2006, 2007 and 2008, Papanier persuaded Primo Hoagies franchise owners to buy Thumann’s deli products from Nellie’s Provisions, often paying for them in cash. He took a significant amount of the cash paid to Nellie’s Provisions and deposited it into his personal bank accounts. Papanier admitted that he did not report the diverted cash to the IRS and only reported Form W-2 wages, interest and dividend income, and property tax information. By omitting all of the diverted cash, he failed to disclose and report a significant portion of this income on his tax returns, causing those tax returns to substantially understate the amount of income he received.
Rakesh Chitkara, 60, of Marlboro, N.J., pleaded guilty March 21, 2013, to making and subscribing to a 2007 federal income tax return to the IRS that he did not believe to be true. Chitkara admitted that he had a financial interest in at least two financial accounts at UBS AG in Zurich, Switzerland, and that he knowingly failed to disclose these accounts, and income from these accounts, on his personal tax returns for five years.
Joseph Gallagher, 69, of Rutherford, N.J., a tax preparer and disbarred New Jersey lawyer, was sentenced on March 20, 2013, to 36 months in prison for submitting false tax returns or failing to file returns for five years, resulting in a tax loss to the government of more than $1.1 million.