A roundup of our favorite recent tax fraud cases.
Brandon, Miss.: Preparer Kushauntia Jones, owner of Mobile Express Tax and Accounting Service, has been sentenced to 20 years in jail after pleading guilty to tax evasion and computer fraud.
In June 2015 the Mississippi Department of Revenue began investigating Mobile after noticing numerous irregularities on income tax returns the company prepared. Investigators spoke with Jones, who was unable to explain the questionable returns and was unable to provide any documentation that she relied on in preparing the returns.
The only explanation she was able to offer was that she suffered a computer problem that may have incorrectly populated certain fields on the returns.
Investigators then spoke with numerous Mobile clients and found that they were unaware of the fraudulent returns submitted on their behalf. Investigators also determined that Jones would prepare a written return with the proper information and would present the correct return to the taxpayer for their signature and records.
Jones would then e-file a fraudulent return to the Mississippi Department of Revenue and the U.S. Treasury where she would increase the amount of the refund owed to the taxpayer. Jones would then direct the state and federal government to deposit the additional funds into her business account.
Investigators found that for 2013 and 2014 Jones had illegally collected more than $300,000 in overstated refunds, that she used the funds for personal expenses, and that she failed to claim the amount on her personal income tax returns.
Xenia, Ohio: Preparer Robert Coates, 42, has been sentenced to 18 months in prison and three years of supervised release and been ordered to pay $445,450 restitution to the IRS for filing false claims for income tax refunds, according to published reports.
Between January and July 2012 Coates filed false claims for income tax refunds with the IRS and filed fraudulent returns on behalf of individuals referred to Coates by other taxpayers or for those who responded to a flyer Coates distributed in and around Xenia, according to cited IRS information.
Coates enticed individuals to allow him to file their returns by explaining that they would receive a refund even if they did not work or were receiving disability payments, the IRS reportedly added. Unbeknownst to the taxpayers, Coates reportedly included fraudulent amounts of income in the form of household help income to maximize the Earned Income Tax Credit and generate a refund. In addition, news outlets said, Coates included fraudulent amounts of qualified educational expenses to generate a refundable education credit.
Coates reportedly filed these returns knowing that the household help income amounts and qualified education expenses were fraudulent and the claimed income tax credits and refunds were fraudulent. He collected his fee by diverting a portion of the income tax refund into one or more bank accounts that he controlled, reports added.
In total, Coates reportedly filed at least 170 false income tax returns for the 2011 income tax year, causing a tax loss of $445,450, of which $167,422.63 was directed into his bank accounts.
Phoenix: Preparer Paula Anthony has been convicted of multiple charges in a fraud scheme that authorities told news outlets netted more than $312,000.
The IRS reportedly said that the fake returns contained taxpayers’ names and personal information along with fabricated reported wages, but inflated federal withholdings to generate a large refund.
Sentencing is Feb. 13, reports added.
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