California Tax Preparer Sentenced to 5 Years in Jail
A Southern California tax preparer has been sentenced to five years in prison for preparing and filing false tax returns.
Ernesto Jesus Suarez, 61, of Orange, Calif., was also sentenced to three years’ probation by Judge Stephen V. Wilson in a Los Angeles federal court and ordered to pay total restitution of $753,477.
Suarez pleaded guilty in June to preparing and filing hundreds of tax returns, including his own, that claimed inaccurate and false items on his taxpayer-clients’ returns. Suarez allegedly collected over $672,478 in stolen tax refunds from the IRS and $80,729 from the Franchise Tax Board (see IRS Stops Tax Preparers Accused of Stealing Client Refunds).
According to the plea agreement, Suarez would meet clients at their homes and prepare a largely accurate income tax return on his laptop. If the client was due a refund, Suarez would give the client a check from his personal checking account in the amount stated on the accurate return and misrepresent to the client that he would file the accurate return with the IRS.
Later, Suarez would prepare a false tax return, including fictitious items such as false spouses, dependents, child or dependent care, and education expenses, in order to increase the refund amount. Suarez would forge the signature of the taxpayer and then mail the false tax return to the IRS. He would then direct the inflated refunds to be deposited into 29 different bank accounts that he controlled.
Also according to the plea agreement, Suarez admitted that he used a similar scheme for himself on his 2008 federal income tax return, claiming a fictitious spouse and dependent. Suarez also admitted that he failed to report his true income from his tax return business and the illegal refunds he received.
A civil injunction order permanently barring Suarez from preparing tax returns for others was signed in June by Judge Cormac J. Carney of the U.S. District Court for the Central District of California. The order also prohibits Suarez from representing clients before the IRS and from aiding, advising, or assisting in the preparation of federal tax returns for life.
As part of his plea agreement, Suarez agreed to publish the civil injunction to all of his current clients. The investigation was conducted by the U.S. Attorney’s Office in Los Angeles and the Internal Revenue Service’s Criminal Investigation division.