Examples of Abusive Return Preparer Investigations - Fiscal Year 2013

The following examples of abusive return preparer investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Florida Tax Preparer Sentenced for Preparing False Returns
On December 13, 2012, in Orlando, Fla., William M. Gatlin, of Kissimmee, was sentenced to 36 months in prison and one year of supervised release. On September 24, 2012, Gatlin pleaded guilty to two counts of aiding and abetting the false preparation of tax returns. According to court documents, Gatlin was the president of Taxes By Mr. Bill, Inc., a tax preparation business in Orlando and Kissimmee. He aided and assisted in the preparation of fraudulent tax returns for his clients, causing false and inflated income tax refunds for the tax years 2006, 2007 and 2008. Gatlin fraudulently claimed a first-time home buyer credit. He also deducted student tuition, fees, and student loan interest on returns where individuals did not pay these costs. In addition, Gatlin prepared returns where he fraudulently listed deductions for Schedule C business losses when he knew that his clients did not own a business or have Schedule C losses. All of the deductions were done without his clients’ knowledge.

Tax Preparer Sentenced for Preparing False Returns
On December 3, 2012, in Omaha, Neb., Noah Maliko, a citizen of Zimbabwe, was sentenced to 18 months in prison, one year of supervised release, and ordered to pay $55,402 in restitution. Maliko pleaded guilty to 15 counts of preparing false individual income tax returns for the 2007 and 2008 tax years. According to court documents, Maliko prepared tax returns under the name Reliable Express Tax Services. Maliko prepared and electronically filed at least 26 fraudulent returns resulted in a tax loss to the United States of $90,277. On many occasions the taxpayers were unaware of the false returns electronically filed by Maliko.

California Woman Sentenced for Preparing and Filing False Returns
On November 26, 2012, in Riverside, Calif., Kelly Tezino, of Los Angeles, Calif., was sentenced to 21 months in prison, two years of supervised release, and ordered to pay $533,434 in restitution to the IRS. Tezino pleaded guilty in August 2012 to a one-count Information charging her with preparing and filing with the IRS a false 2006 income tax return for an individual reporting false wages and tax withholdings from an employer for which the individual never worked. According to court documents, from approximately March 2006 to February 2009, Tezino knowingly filed at least 76 fraudulent income tax returns, falsely claiming refunds of approximately $533,434. The income tax returns prepared and filed by Tezino often claimed refunds based on false Forms W-2 which completely fabricated the individual’s salary and withholdings. Additionally, Tezino used her personal, her children’s, and her associates’ personal bank accounts as the bank account reported on the false returns where the fraudulent direct deposits were to be deposited by the IRS.

New Jersey Tax Preparer Sentenced for Filing False Tax Returns
On November 20, 2012, in Newark, N.J., Alicia Barnes, of Irvington, N.J., was sentenced to 18 months in prison and one year of supervised release. Barnes, a former corrections officer for New Jersey and self-employed owner of a tax preparation business, pleaded guilty to one count of willfully aiding and assisting in the preparation and filing of false personal federal tax returns and one count of willfully subscribing to false personal federal income tax returns. According to court documents and statements in court, Barnes is the sole owner and operator of Just Taxes Unlimited LLC located in Orange, N.J. During tax years 2006 through 2008, Barnes filed 42 false tax returns on behalf of clients by taking deductions for charitable contributions and unreimbursed employee expenses without a basis for doing so. In addition, Barnes admitted that for tax years 2006 through 2008, she filed U.S. Individual Income Tax Returns in which she failed to report, or substantially under-reported, the income she earned through Just Taxes Unlimited.

Arkansas Woman Sentenced for Preparing False Returns for Clients  
On November 16, 2012, in Fort Smith, Ark., Jennifer Siriphounsavath was sentenced to 18 months in prison and ordered to pay $144,382 in restitution to the IRS and a $3,500 special assessment. Siriphounsavath pleaded guilty in July 2012 to aiding and assisting in the preparation of false income tax returns. According to court documents, from around January 2008 through April 2010, Siriphounsavath falsely prepared tax returns for fourteen individuals by falsely claiming education and residential energy credits and inflating property tax and charitable contributions deductions. The fraudulent deductions totaled $144,382.

Texas Woman Sentenced for Tax Fraud
On November 8, 2012, in Beaumont, Texas, Sheila Phillips, of Lufkin, Texas, was sentenced to 30 months in prison and ordered to pay $124,217 in restitution. Phillips pleaded guilty in May 2012 to one count of making a false statement to the IRS. Phillips operated a tax preparation business, dba Sheila’s Tax Return and later as Ashley’s Tax Service. According to court documents, Phillips prepared a tax return falsely stating that a client was the head of household and had a foster child which qualified the individual for a larger deduction. This individual did not have any children or foster children that would have qualified for this deduction. In all, Phillips made false statements in 29 individual tax returns resulting in overpayments in the amount of $124,127.

Georgia Man Sentenced for Tax Evasion
On November 7, 2012, in Albany, Ga., Kenneth Wayne Wright, of Dougherty County, Georgia, was sentenced to 12 months in prison, one year of supervised release and ordered to pay $193,000 in restitution to the IRS. On August 17, 2012, Wright pleaded guilty to one count of aiding and abetting the filing of a false tax return. According to court documents, Wright ran a tax preparation business in called Ken’s Fast E-File. According to his plea agreement, Wright filed 44 false tax returns for 13 different taxpayers during the period 2006 through 2008. Wright caused the taxpayers to receive a total of $193,000 in refunds to which they were not entitled.

Virginia Tax Preparer Sentenced for Preparing False Tax Returns
On November 5, 2012, in Norfolk, Va., Paul Zimmerman, Jr., of Virginia Beach, Va., was sentenced to 21 months in prison and one year of supervised release. Zimmerman pleaded guilty on July 11, 2012, to aiding and assisting in the preparation of false tax returns. According to court documents, Zimmerman owned and operated Paul’s Taxes and Services located in Norfolk. Zimmerman provided assistance with preparing federal income tax returns for his clients. Zimmerman, without his clients’ knowledge, would claim illegitimate rental properties, inflate expenses related to legitimate rental properties, inflate business expenses, and claim mortgage interest payments on properties without mortgages. This falsely reported information would result in lowering his clients’ tax liabilities or in generating refunds. Court documents state that Zimmerman aided and assisted in the preparation of 35 false tax returns for 17 different clients for tax years 2006 through 2009. The tax loss to the government was $102,704.

California Tax Preparer Sentenced for Filing False Tax Returns and Theft of Refund Checks
On November 5, 2012, in Santa Ana, Calif., Mark Joseph Jensen, a tax preparer, was sentenced to 18 months in prison and three years of supervised release. Restitution will be determined at a later date. Jensen pleaded guilty on October 20, 2011 to filing a false tax return and receiving a stolen refund check from IRS. According to the plea agreement, Jensen prepared and filed at least 24 tax returns falsely claiming the First-Time Homebuyer Credit. Jensen knew that his clients did not qualify for the credit because the taxpayers had not purchased a home in 2008. Jensen also did not tell his clients that he was fraudulently claiming the First-Time Homebuyer Credit on their tax returns. Jensen directed the portions of his clients’ refunds be deposited into bank accounts that he controlled. According to court documents, the amount of false credits claimed ranged from $1,612 to $8,000 per tax return. In a second scheme, Jensen stole some of his clients legitimate tax refunds by representing to his clients that they would not be receiving a refund or were receiving a refund less than their true refund. In furtherance of this scheme, Jensen used his address on his client’s tax return and provided his bank account number to receive the refund. He also concealed his fraud by not providing clients with copies of their tax returns. In total, Jensen diverted more than $13,000 in client’s legitimate tax refunds to his bank accounts.

Tax Return Preparer Sentenced
On November 1, 2012, in Chicago, Ill., Rimando Naig Dumdum was sentenced to 24 months in prison and ordered to pay $231,758 in restitution. According to court documents, beginning in 2002 and continuing through 2009, Dumdum operated an income tax return preparation service known as Richman Tax Solutions, Inc. For 2006 through 2008, Dumdum failed to file corporate income tax returns for Richman Tax Solutions resulting in a tax loss of approximately $120,859. In addition, Dumdum under-reported his income on his personal tax returns for the tax years 2006 through 2008 which resulted in a tax loss of approximately $93,794. Dumdum further acknowledged that he willfully prepared approximately 12 false income tax returns for clients for the tax years 2006 through 2009. The total tax loss associated with the false client tax returns is approximately $17,480.

District of Columbia Tax Return Preparer Sentenced for Preparing False Tax Returns
On November 1, 2012, in Washington, D.C. Enyinnaya Udo was sentenced to 24 months in prison and ordered to pay $262,966 in restitution to the IRS. Udo was convicted by a jury on 25 counts of aiding and assisting in the preparation of false tax returns. According to court documents, Udo operated a tax preparation business called Anic and Associates, CPAs PC located in Washington, D.C. Udo prepared false individual income tax returns for seven taxpayers from 2005 through 2008, falsely reporting that the taxpayers had unreimbursed employee expenses.

Minnesota Tax Return Preparer Sentenced for Preparing False Corporate Tax Return
On October 26, 2012, in Minneapolis, Minn., Michael James Murry, a certified public accountant and tax preparer, was sentenced to 18 months in prison, one year of supervised release, and fined $50,000. Murry pleaded guilty on May 3, 2012, to one count of preparing a false corporate tax return. In his plea agreement, Murry admitted that on September 15, 2006, he aided in the preparation and submission of a false corporate income tax return for The Wirth Companies (TWC), a commercial real estate development and management business. In addition, Murry admitted that on the 2005 corporate tax return, he reflected $0 in property distributions to Wirth and his then-wife, Holly Claire Damiani, even though he knew TWC had provided substantial monetary distributions to the pair.

Maryland Tax Preparer Sentenced for Filing False Tax Returns
On October 17, 2012, in Baltimore, Md., Obinna Felix Ukwu, of Perry Hall, Maryland, was sentenced to 51 months in prison, one year of supervised release, and ordered to pay $429,392 in restitution. Ukwu was convicted by a jury on July 16, 2012, on 12 counts of aiding in the filing of false tax returns. According to evidence presented at trial, for tax years 2006 through 2008, Ukwu prepared and filed false tax returns for three taxpayers, claiming fraudulent business losses totaling $388,247. Ukwu prepared and filed tax returns for another taxpayer, claiming a total of $115,552 in fraudulent business losses for tax years 2007 and 2008. In addition, he prepared and filed a tax return for a fifth taxpayer fraudulently claiming $52,560 in business losses for tax year 2008.  

California Tax Return Preparer Sentenced for Filing Fraudulent Tax Returns
On October 15, 2012, in Los Angeles, Calif., Ernesto Jesus Suarez, of Orange, was sentenced to 60 months in prison, three years of supervised release and ordered to pay $753,477 in restitution. On June 11, 2012, Suarez pleaded guilty to preparing and filing hundreds of tax returns, including his own, that claimed inaccurate and false items. According to his plea agreement, Suarez would meet clients at their homes and prepare a largely accurate income tax return on his laptop. If the client was due a refund, Suarez would give the client a check from his personal checking account in the amount stated on the accurate return and misrepresent to the client that he would file the accurate return with the IRS. Later, Suarez would prepare a false tax return, including fictitious items such as false spouses, dependents, child or dependent care, and education expenses, to increase the refund amount. Suarez would forge the signature of the client and then mail the false tax return to the IRS. Suarez would direct the inflated refunds to be deposited into 29 different bank accounts that he controlled. Suarez admitted that he utilized a similar scheme for himself on his 2008 federal income tax return, claiming a fictitious spouse and dependent and failing to report his true income from his tax return business and the illegal refunds he received. In addition to his prison time, on June 19, 2012, a civil injunction order was signed, permanently barring Suarez from preparing tax returns for others. The order also prohibits Suarez from representing clients before the IRS and from aiding, advising, or assisting in the preparation of federal tax returns for life. As part of his plea agreement, Suarez agreed to publish the civil injunction to all of his current clients.

Ohio Woman Sentenced on Tax Conviction
On October 12, 2012, in Cleveland, Ohio, Aesha Johnson, of Beachwood, was sentenced to 21 months in prison, two years of supervised release and ordered to pay $84,244 in restitution. Johnson pleaded guilty in May 2012 to one count of filing false tax returns for the years 2005 through 2009. According to court documents, Johnson prepared clients’ returns that included false claims for refunds totaling approximately $84,244.

California Tax Return Preparer Sentenced for Filing False Tax Returns
On October 12, 2012, in Los Angeles, Calif., Juan Manuel Mendez, owner of Mendez Multi Services, was sentenced to 18 months in prison, one year of supervised release and ordered to pay $367,000 in restitution. On June 6, 2012, Mendez pleaded guilty to filing false income tax returns with the IRS. According to court documents, Mendez filed at least 17 false federal income tax returns claiming real estate deductions on Schedule A. Mendez also filed one false tax return for himself for calendar year 2007. He also failed to file tax returns for himself for calendar years 2006 and 2008. According to his plea agreement, Mendez agreed to a civil injunction, barring him for life from preparing federal income tax returns or representing anyone before the IRS other than himself and his legal spouse. Mendez also agreed to cooperate with the IRS and make full restitution for the losses he caused.

Alabama Woman Sentenced for Filing a False Tax Return
On October 4, 2012, in Mobile, Ala., Delois Warren of Greensboro, Alabama was sentenced to 12 months and one day in prison, one year of supervised release and ordered to pay $173,455 in restitution. She was also ordered not to prepare tax returns for others during the time. Warren pleaded guilty to filing a false 2008 tax return which reported gross receipts of $6,468 for her tax return preparation business. The true gross receipts was $264,594.

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