Some of our favorite recent tax frauds:
New York: Preparer Ranti Azeez-Taiwo of Staten Island, N.Y., received 18 months in prison to be followed by one year of supervised release and been ordered to pay $24,802 in restitution after being convicted on 16 counts of aiding or assisting in the preparation of false income tax returns for clients.
According to evidence at trial, Azeez-Taiwo, while operating the tax prep business Lot Associates Inc., prepared false individual returns for clients during the 2006 through 2010 tax years. These returns claimed unreimbursed employee expenses and charitable donations claimed without clients’ knowledge. Several taxpayers also testified that they paid fines and interest to the IRS as a result of the false returns.
Baton Rouge, La.: Preparer Ashley D. Ricks-Stampley has been sentenced to 81 months for wire fraud and aggravated ID theft and sentenced to three years of supervised release following her release from prison, and ordered to pay $699,734.89 in restitution to the IRS and $11,138 to the Louisiana Department of Revenue, according to published reports.
She was charged last year in connection with obtaining the names and personal ID information of numerous victims and then using the information to submit false income tax returns for the 2010 and 2011 tax years. Ricks-Stampley submitted approximately 455 false tax returns and fraudulently obtained approximately $559,953 through her scheme.
Compton, Calif.: Preparer Anthony Gray, 36, owner and operator of Anthony Gray Tax Service, agreed to plead guilty to one count of aiding or assisting in the preparation of a false return.
According to the plea agreement, beginning in approximately 2007 and continuing through April 2011 Gray prepared returns on behalf of hundreds of clients and sometimes inflated refunds by including false information, including false deductions for charitable contributions, work expenses, dry cleaning and education.
The count to which Gray will plead guilty relates to a fraudulent 2009 return he prepared claiming $13,294 in fabricated deductions and a $10,000 fabricated education credit. The client for whom Gray prepared this return never told him that she had incurred these expenses or asked that they be included on her return.
Tax losses in the case were at least $108,150. According to the agreement, Gray faces a maximum of three years in prison and a fine of $100,000 when sentenced. He may also be ordered to pay restitution to the IRS.
Kahuku, Hawaii: Preparer Melanau Fohe Haiola, 52, owner and operator of Nau’s Tax Preparation, has been indicted for preparing false returns for clients and for failing to report income she earned.
The indictment charges that Haiola prepared 17 federal income tax returns that fraudulently claimed the American Opportunity Credit, personal property rental expense deductions, or medical, dental or employee expenses. In addition, the indictment charges that Haiola filed false returns for herself for the 2009 and 2010 tax years by underreporting her income by a total of $114,315. If convicted, she faces up to three years in prison and a fine of up to $250,000 for each of the 19 charges.
Hillside, N.J.: Preparer Karan Jenkins, 55, owner of the tax prep firm KLJ Consultants, pleaded guilty to willfully preparing false returns for clients.
According to case documents and statements in court, Jenkins admitted that for the 2010 tax year she prepared a return for a client that contained false deductions of $29,232, causing a tax loss the government of $11,937. Jenkins also admitted that between 2008 and 2011 she prepared 37 other returns for clients that contained false information; these returns cost the government $138,043. Her charge carries a maximum prison sentence of three years and a fine. Sentencing is June 17.
Durham, N.C.: Preparer Garcia M. Howard, 62, owner and operator of Howard Financial Services Inc., pleaded guilty to three counts of attempting to evade or defeat tax in connection with charges filed by the North Carolina Department of Revenue.
Howard received an 18-month minimum, 22-month maximum prison term to be followed by five years of probation, and was ordered to pay restitution of $56,013.79 and a $100 fine. He was further ordered not to prepare taxes for anyone other than himself.
Information presented in court showed that he received taxable income from his tax prep business but understated the income on his 2007 through 2010 state income tax returns.
Howard was convicted of similar charges brought by the North Carolina Department of Revenue in 1998 and 2001: in 1998 of 15 counts of aiding in the preparation of false returns while president of TPTA Accounting & Financial Services, and in 2001 of five counts of aiding or assisting in the preparation of fraudulent returns while operating HFS.
Lenexa, Kan.: Preparer John M. Moore, 52, pleaded guilty to federal tax fraud charges that cost a Kansas company more than $744,000. Moore pleaded guilty to one count of filing a false return and one count of wire fraud.
He admitted that a company he owns, Accent Payroll Services, was hired to provide payroll processing services for Tytan International LLC and from 2008 to 2010 was responsible for paying the wages of Tytan’s employees, withholding employment taxes, filing Tytan’s employment returns, and paying withheld employment taxes to the IRS. Moore transferred more than $2 million in employment tax withholdings from Tytan’s bank account to his company’s bank account but paid the IRS only some $1.3 million. To keep Tytan from receiving notices from the IRS, Moore gave the IRS an address for Tytan at a post office box he controlled.
Sentencing is set for May 29 when Moore faces a maximum of three years in prison and a fine up to $100,000 on the charge of filing a false tax return, and a maximum of 20 years and a fine up to $250,000 on the wire fraud count.
Chicago: The federal government has sued The Tax Helper Corp. and seeks to permanently bar the company and its alleged co-owner, Johnnie Pernell Jr., from preparing federal returns for others. According to the complaint, Pernell prepared returns that falsely claimed deductions for fake business expenses and phony education expenses.
One example in the complaint details how Pernell allegedly prepared a return that improperly claimed a fake electrical business for one customer, reporting no income from the electrical business but more than $24,000 in bogus losses. The customer, according to the complaint, informed the IRS that he did not own an electrical business, had provided no documents to Pernell to support the expenses claimed and had no idea how Pernell had determined the amount of expenses reported.
Dallas: Preparer Dianelys Armengol Guevara, 28, pleaded guilty to contempt of court for violating a 2011 court order that prohibited her from acting as a return preparer, according to reports.
Published reports said that Armengol Guevara was previously found civilly liable for improperly claiming First-Time Homebuyer Credits, education credits, deductions and other expenses for clients when she worked as a preparer for Liberty Tax Services between 2005 and 2009. She reportedly admitted that she resumed filing returns for others in 2011 and prepared well over 100 returns that underpaid the IRS by an average of $3,358 per return, prosecutors said in reports. She must reportedly pay $54,250 in restitution to the IRS and faces prison at her April sentencing.
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