A former IRS revenue officer has been sentenced to nearly three-and-a-half years in prison for filing false tax returns through the tax prep business he operated after leaving the IRS.

Anthony Pendleton, 59, owner of Payless Tax Service, in Inglewood, Calif., was convicted of conspiracy to defraud the United States by filing tax returns that fraudulently sought tax refunds. He was ordered by U.S. District Judge Otis D. Wright II to spend three years on supervised release after serving his prison sentence. In addition, the judge ordered Pendleton on Wednesday to pay restitution totaling $179,037 to the IRS.  

According to court papers, Pendleton, along with co-conspirators Christopher Edwards and Asha Lenard, conspired to file false claims for tax refunds with the IRS while working at Payless. The claims for refunds included, among other things, falsified employment income and dependents.

During the execution of a search warrant at Payless, investigators recovered various documents and records related to the crime. Among the documents recovered, was one entitled “Payless Tax Fee Schedule 2003,” which detailed how much Payless charged to prepare returns for clients using children that are not dependents ($499 for two kids or $250 for one kid) and prepare returns for clients with no W-2 forms (50 percent of the refund amount).

Pendleton was ordered to begin serving his sentence on Sept. 10, 2010. Both Lenard and Edwards earlier pleaded guilty to the same charge. Both face a statutory maximum penalty of 10 years in federal prison and a potential fine of $250,000 or twice the gross gain or loss, whichever is greater, when they are sentenced later this year.

In sentencing Pendleton, Judge Wright specified that Pendleton was jointly and severally liable with Lenard and Edwards for the amount of restitution payable to the IRS. Lenard and Edwards are scheduled to be sentenced on Sept. 10, 2010.

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