Some of our favorite recent tax fraud cases.
Los Angeles: The U.S. has asked a federal court to bar preparer Elton L. Barnes Jr. from preparing returns for others.
In 2002, Barnes pleaded guilty to aiding and assisting in the preparation of false returns but resumed preparing returns when released from prison, the government alleges. Since then, according to the complaint, he has repeatedly prepared federal income tax returns, sometimes under the names McNair Group, So Cal Financial Services and Anderson Investment Group, with fraudulent claims such as inflated charitable contribution deductions and losses from imaginary home businesses. The complaint further alleges that Barnes prepared returns that intentionally overstate the federal tax withheld from clients’ paychecks.
According to the complaint, an IRS audit of more than 180 returns Barnes prepared and that have been filed since his release from prison in 2009 has already identified almost $2 million in false refunds and understatements of taxes owed. The audits are continuing.
The complaint also alleges that Barnes met with a customer and obtained the customer’s personal ID information including name, address and Social Security number. Allegedly, without the customer’s knowledge, Barnes then used the information to file a return that directed the IRS to deposit the claimed refund into his own bank account.
According to the complaint, Barnes also failed to sign returns he prepared or use his PTIN on them.
Forsyth, Ga.: Business owners Cathie Simpson, 45, Conyers, Ga., and Donna Simpson, 40, have been arrested for filing fraudulent returns.
Local authorities said that the investigation began several months ago when a former employee of Legacy Tax Service contacted authorities to report that her preparer number was being used without her consent to file fraudulent returns. Investigation revealed that the Simpsons were filing fake returns, local authorities said.
Cathie Simpson is charged with three counts and Donna Simpson with one count of false statements and documents. Authorities added that investigation continues.
West Frankfort, Ill.: Preparer Teresa A. Joplin, 52, has been arrested on six counts of theft after allegedly stealing more than $10,000 from her clients, according to published reports. Authorities told news outlets that between February 2012 and February 2014 Joplin stole IRS refunds from three clients. She posted $4,500 bond and was released, according to reports, which added that the investigation continues.
Racine, Wis.: Preparer Michelle C. Stevens, 45, was charged with ID theft that allegedly occurred as she worked preparing income taxes for clients, according to reports.
Stevens reportedly faces three counts of felony personal ID theft, among others, in connection with alleged incidents from when she worked as a preparer last year. According to cited court reports, a woman told local police that in 2012 she filed a return at a nearby Liberty Tax office with Stevens as the preparer and experienced no problems.
When the victim filed in January 2013 at an H&R Block franchise, reports said, she was informed that her taxes had already been filed and that a refund check of $7,156.02 had been deposited in a local bank and later transferred to another account that police traced to Stevens.
According to published reports, in April 2013 another woman complained to police that she had paid Stevens that February to file her 2012 taxes on Turbo Tax. When she received no refund by March, the victim made inquiries and learned that her $4,971 refund had been deposited in a California bank account and subsequently transferred to a Wells Fargo account that police learned belonged to a woman who was living at the same address as Stevens.
Stevens was arrested after she failed to make her initial appearance in county court, said reports, which added that if convicted she faces up to six years in prison and a fine of up to $10,000 for each felony charge.
Jacksonville, Fla.: Preparer Raymond Jones Jr. has reportedly pleaded guilty to filing fraudulent federal returns in one of 73 cases investigators said cost the government over $400,000.
Tax returns filed by Jones in 2010 and 2011 on behalf of clients included overstatements of deductions to self-employed retirement plans, education and expenses, according to prosecutors and court documents cited in news reports.
At his October 21 sentencing, Jones faces a maximum of three years in federal prison, a fine of $250,000 or both, as well as other conditions.