A former manager at Jackson Hewitt has admitted to falsifying more than 52 tax returns.

Lydia Johnson pleaded guilty in an Oakland federal court on Friday to aiding and assisting in the filing of false income tax returns.

Johnson began preparing tax returns in approximately 2002 for Jackson Hewitt and was employed there until 2007.  She was promoted to manager before the 2005 tax season. When her employment at Jackson Hewitt ended, Johnson began preparing taxes from her home in 2008. 

According to the plea agreement, from 2005 through 2008, Johnson prepared and filed at least 52 federal income tax returns that she knew were false.  She did not ask for supporting documentation for certain exemptions, deductions or credits. Instead, she created false exemptions, deductions and credits, including for thousands of dollars of home mortgage interest and points for a client whom she knew did not have any documentation of home ownership, and did not have any documentation of a mortgage.

Johnson also admitted to taking false deductions for thousands of dollars of medical and dental expenses, when she had no documentation to believe that the client had actually incurred these expenses. Johnson also admitted to taking false deductions for both monetary and non-monetary gifts to charity, when she had no documentation to believe that the client had actually incurred these expenses.

In addition, she admitted to false deductions for job and miscellaneous expenses, including a deduction for a safe deposit box when she had no documentation to believe the client even had a safe deposit box.

Johnson agreed that her conduct and the conduct of her clients resulted in a tax loss to the government of $164,923.

Johnson, 51, of Rodeo, Calif., was indicted by a federal grand jury on Oct. 22, 2009. She was charged at the time with 20 counts of aiding or assisting in the filing of a false income tax return.  Under the plea agreement, Johnson pled guilty to four counts.

Sentencing is scheduled for Dec. 3, 2010. The maximum statutory penalty for each count is three years in prison and a fine of $250,000, plus restitution.

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