The Justice Department and Internal Revenue Service (IRS) announced today that John T. Hoang, of Woodbridge, Va., pleaded guilty in federal district court in Washington, D.C., to willfully aiding and assisting in the preparation of false income tax returns for tax year 2004.
According to court documents and statements made in court, Hoang was a certified public accountant (CPA) and an attorney. From January 2005 through April 2007, Hoang operated John T. Hoang CPA, a tax return preparation business and was one of two partners who owned Tax-Smart Technology Services. Hoang operated John T. Hoang CPA and Tax-Smart from various locations in the District of Columbia and Fairfax, Va.
In his capacity as a tax return preparer, Hoang prepared and supervised the preparation of client tax returns to be filed with the IRS and various state taxing authorities. For the tax years 2004, 2005 and 2006, Hoang prepared hundreds of Forms 1040 (U.S. Individual Income Tax Returns) and earned substantial income from his tax preparation activities. Hoang further received, through John T. Hoang CPA and Tax-Smart, a substantial portion of the refunds issued by the IRS to his clients. Despite earning revenue through his businesses of approximately $1 million in 2004; $2 million in 2005; and $3 million in 2006, Hoang failed to file any federal income tax returns or pay any federal income taxes for himself or his businesses.
Hoang admitted that he prepared and caused the preparation of false and fraudulent 2004, 2005 and 2006 Forms 1040 for his clients. When preparing these false Forms 1040 and related schedules for his clients, Hoang created wholly fictitious business income and expenses for what purported to be a technology licensing business. The false information resulted in the client-taxpayers reporting fake losses from the business activity and receiving either larger refunds than they were entitled to or a decrease in the amount of taxes due. Hoang admitted that the tax loss caused by some of the false returns he prepared was greater than $30,000 per return and that he prepared at least 24 such false returns for the 2004 through 2006 tax years.
As part of the plea agreement, Hoang admitted that the total tax loss caused by his criminal conduct is greater than $1.5 million.
United States District Judge Richard J. Leon, who is presiding over the matter, set a sentencing date of Nov. 06, 2013. Hoang faces a maximum sentence of six years in prison and a $500,000 fine.
The case was investigated by IRS-Criminal Investigation and is being prosecuted by Trial Attorneys Jorge Almonte and Jeffrey B. Bender of the Justice Department’s Tax Division.