A California tax preparer was sentenced to more than five years in prison and ordered to pay $377,468 in restitution after she was convicted of tax fraud.

Fe S. Garrett, a resident of National City, Calif., was found guilty last August of filing false individual tax returns, failure to pay taxes, and multiple counts of aiding and assisting in the preparation of false tax returns following a nine-day trial.

According to prosecutors, for tax years 2001 and 2002, Garrett prepared at least 18 federal income tax returns for her clients that claimed fraudulent itemized deductions, child care expenses and Schedule E real estate rental expenses in amounts that she knew her clients were not entitled to claim. Prosecutors contended that Garrett spent hundreds of thousands of dollars at local casinos, wired over $100,000 to the Philippines, and did not respond to numerous attempts by the IRS to contact her.

However, despite her avoidance of the IRS, Garrett prepared a false tax return for an undercover IRS agent that included false items similar to those on her client’s returns. In a recording presented at trial, Garrett was heard describing her “style” of preparing tax returns using “loopholes” for claiming deductions on income tax returns.

Garrett was a licensed tax return preparer and licensed real estate broker who operated a tax return preparation and bookkeeping business, and a real estate financing business, under multiple names, including Fe’s Tax Service, Garrett’s Tax Service and Garrett’s Realty and Mortgage. Garrett failed to report over $300,000 of her gross receipts from those businesses on her federal income tax returns for tax years 2001, 2002, 2004 and 2005, according to prosecutors. 

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