Some of our favorite recent tax fraud cases.
Philadelphia: Preparer Crystal Graham, 42, has been sentenced to one year in prison and ordered to pay $266,243 restitution to the IRS for filing false claims through federal income tax returns.
Graham created bogus wage statements and other false financial information that she placed on returns she prepared to obtain refunds in the names of the filers. The fraudulent returns sought refunds of $354,000 based on bogus expense deductions and refundable credits such as the First-Time Home Buyer’s Credit and the EITC when the taxpayer had little, if any, taxes withheld from income in that year.
Graham also had clients sign statements giving her the authority to deposit the refund checks into her savings account or to have the refund checks placed on prepaid access devices, giving her the ability to take a substantial portion of the fraudulent refunds before giving her clients the remainder.
She pleaded guilty on September 22 to 11 counts of filing false claims.
In addition to the prison term and restitution, Graham must pay a $1,100 special assessment and is also prohibited from preparing returns.
Baton Rouge, La.: Preparers Madie Langley and her son Darin Langley face 40 felony counts of suspected fraud in their work at their prep service Matrix Computers and Tax Services.
During the investigation, interviews with clients showed that returns submitted by the two had suspicious information, showing a false businesses and false business losses when, in fact, the clients in question did not own a business or had not sustained a loss.
Darin Langley faces 24 counts of suspected fraud and was arrested on December 22. Madie Langley faces 16 counts of suspected fraud and was arrested on January 12.
Dallas: A federal court has permanently barred Ricia Daniels and Ricia Daniels, d/b/a as Ricia’s Convenience Tax Service and Ricia’s Convenience Tax Service Inc., from preparing returns for others.
The complaint alleged that the defendants prepared returns for their customers that falsely claimed improper or inflated deductions of medical expenses, unreimbursed employee business expense and other deductions on Schedule As, improper or inflated business expense deductions and education expenses, and improper or inflated fuel taxes.
The complaint also alleged that the defendants filed returns without clients’ permission.
The order requires the defendants to turn over to the government a list of all persons for whom they prepared federal tax returns since Dec. 1, 2013, and authorizes the federal government to monitor compliance with the terms of the injunction.
Columbus, Ga.: A federal court has permanently barred Natashia and Detrick Tucker and their business, T&T Express Tax, from preparing federal returns for others.
According to the complaint, the Tuckers prepared federal income tax returns for clients that understated taxes due or generated inappropriate tax refunds. Understatements were caused by improper EITCs and education credits.
According to the complaint, the IRS examined 337 returns of the 2,239 returns prepared by the Tuckers for the tax years 2009 through 2011 and determined that adjustments were needed on more than 87% of those returns.
On Jan. 9, 2014, Natashia Tucker pleaded guilty to conspiring to defraud the U.S. in the assessment and collection of federal income taxes, and Detrick Tucker pleaded guilty to aiding and assisting in the preparation of false tax returns. Natashia Tucker later received 46 months in federal prison and was ordered to pay $1,483,025 restitution to the IRS. Detrick Tucker was sentenced to serve one year and one day in federal prison and ordered to pay $66,235 in restitution to the IRS.
Cedar Springs, Mich.: Preparer Karol Fitzgerald faces government allegations that she created false deductions and fake business expenses, and misrepresented income to get bigger returns for clients, according to published reports.
Federal investigators estimate the government lost out on more than $11 million in 2010 and 2011 alone because of the fraud, reports added.
The IRS reportedly fined Fitzgerald $1,000 for tax years 2004, 2005 and 2006 for understating clients’ incomes on returns, and is examining returns from 2009 to 2012, so far finding that some of Fitzgerald’s customers owe the government an additional $196,590 and penalties totaling $31,815.
The complaint cited by news sources says that Fitzgerald told investigators in 2012 that she retired but that evidence shows she is still preparing returns. The feds reportedly claim Fitzgerald failed to sign the returns she filed in 2012 and used phony ID number for other years to hide that she prepared the returns.
Fitzgerald never filed her own tax returns for 2011 or 2012, but had other people’s returns deposited into her bank account, the cited complaint alleges.
She faces no criminal charges, reports added, but the government is asking that she be barred from preparing taxes.
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