Some of our favorite recent tax fraud cases.
Greenwood and Clinton, S.C.: The U.S. has filed to bar a preparer Julie E. Hueble from preparing federal returns for others.
The civil complaint alleges that Hueble owned and operated three Liberty Tax Service franchise locations in South Carolina and that she and the employees of her prep stores prepared federal income tax returns that improperly understated clients’ tax liabilities or increased claims for refundable tax credits.
The complaint alleges that Hueble and her employees prepared returns for clients that, among other things, falsely reported on Schedule Cs non-existent businesses or inflated income or deductions. The suit further alleges that Hueble and her employees fabricated other deductions, claimed improper filing statuses and falsely claimed dependents, all of which resulted in fraudulently inflating refunds or refundable credits or both.
In one example in the complaint, Hueble fabricated a child-care business for one client even though the client did not own such a business and gave Hueble no documentation showing that she did. The fabrication enabled the client to receive an inflated EITC.
The complaint states that Hueble’s stores prepared 2,165 federal income tax returns between 2012 and 2014, and that she prepared 904 returns during this period. Analysis of returns filed in that time revealed that the harm to the U.S. Treasury caused by Hueble’s conduct might exceed $1 million, according to the suit.
Houston: Preparer Diane Caldwell Larry has received a year and a day in prison following her conviction of falsifying client returns.
The sentence for Larry, who pleaded guilty last July, also included a year of supervised release and an order to pay $168,792 restitution. Larry also promised never again to involve herself in the preparation of tax returns other than her own.
During her plea hearing in July 2014, she admitted that she prepared 33 materially false client returns for tax years 2007 through 2010, the returns generating excessive refunds and costing the IRS some $168,792.
Larry acknowledged she had included in these returns fraudulent “side business” losses and false and excessive itemized deductions and credits to inflate refunds. When some of these tax returns were audited, Larry made up false documents to create an illusion of legitimacy for some of the false and excessive itemized deductions and credits.
Specifically, Larry admitted she included a false $84,215 loss deduction for a non-existent business, as well as false deductions for uniforms upkeep, toll bridge fees, job-related tools and employee business expenses totaling $10,644 in a client’s 2009 tax return.
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