Some of our favorite recent tax fraud cases.
Bastrop, La.: Preparer Stella Marie Dunlap, 37, has pleaded guilty to filing false tax returns.
According to evidence presented at the plea, Dunlap filed fraudulent 1040s during the 2010 and 2011 seasons while employed as a preparer at Faster Tax Services. The returns contained W-2 information from fictitious companies, with the information used to file EITC withholdings.
The IRS issued $104,401 in fraudulent refunds, and Dunlap received kickbacks from some of customers as part of the scheme.
She faces up to three years in prison, one year of supervised release, a $250,000 fine and restitution. Sentencing is June 15.
Ripon, Calif.: The U.S.has asked a federal court to bar preparer Sarad Chand from preparing returns for others.
According to the government’s complaint, Chand repeatedly prepared federal returns that understated clients’ tax liabilities. The complaint alleges that Chand, and others working with him under the business name S. Chand Tax & Accounting Services, prepared returns that falsely claimed inflated or fabricated tax credits or deductions.
The suit notes that Chand most frequently prepared returns that falsely inflated unreimbursed employee business expenses. He also created Schedule Cs with false income, while for other clients he created false losses or inflated expenses.
According to the complaint, these fabrications served to improperly reduce the clients’ taxable income and reduced taxes or created inappropriate refunds. Chand also led his clients to falsely believe that he was a former IRS employee, according to the complaint.
The suit also notes that on May 15 he pleaded guilty to aiding and assisting in the preparation and presentation of a false and fraudulent return. As part of his plea agreement, Chand agreed to the entry of a permanent civil injunction, according to the complaint.
The suit alleges that the IRS has completed examinations of 919 of the approximately 8,155 returns Chand prepared from 2008 to 2012, and that nearly all turned up a deficiency or denial of a refund claim.
The total tax understatement from the 886 returns found to be inaccurate totaled more than $2.7 million.
Destrehan, La.: Preparer Lashanda Vinnett, 30, has been sentenced to 18 months in prison and been ordered to pay $1,092,681.43 restitution to the federal government in connection with helping file hundreds of fraudulent returns that netted more than $1.8 million, according to published reports.
Vinnett and her mother, 46-year-old Cathy Vinnett, pleaded guilty last summer (Accounting Today) to conspiracy to defraud the U.S. government. In October, Cathy Vinnett received 41 months in prison, reports added.
According to court documents, Cathy Vinnett opened D&C Tax Service in 2006 and two years later with her daughter created River Parish Tax Professionals. The Vinnetts, through River Parish, filed approximately 310 bogus returns that created some $1.845 million in fraudulent refunds.
Phoenix: Preparer Jamila K. Smith has pleaded guilty to charges connected with filing false returns and agreed to make restitution of $363,055 to the IRS.
According to her plea agreement, starting in 2010 Smith prepared and filed returns for others from her residence. She fabricated wages and expense information on many of the 1040s and regularly created false W-2s, reporting false wages and fictitious withholdings to inflate refunds.
Sentencing is June 1.
Roswell, N.M.: Preparer Sylvia Franco, who owned and operated Sylvia Tax Service, has been charged with tax fraud and racketeering and alleged to have fraudulently prepared returns for 28 individuals from 2011 to 2014.
Franco is charged with 50 counts of tax fraud, 28 counts of fraud and one count of racketeering in connection with allegedly preparing returns with fraudulent and inflated deductions. Authorities said Franco purportedly ensured her clients larger refunds and cheated the State of New Mexico out of $120,493 in taxes owed.
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