San Jose Resident Barred From Preparing Federal Income Tax Returns
OAKLAND, Calif. – A San Jose resident was permanently barred from preparing tax returns for others and from representing others before the Internal Revenue Service, United States Attorney Melinda Haag announced.
According to the civil complaint, on Jan. 16, 2008, Lydia Hernandez, who operated Lydia Hernandez Tax Services, was indicted for tax evasion and for assisting in the preparation of false income tax returns. The indictment alleged that Hernandez created false Schedule C businesses for her clients who did not own or operate a business; claimed false deductions for state and local taxes, depreciation, and mileage expenses; and claimed false deductions for items such as gifts, dry cleaning expenses, cell phone expenses, gym fees and union dues that were not deductible. On July 27, 2009, Hernandez pled guilty and was subsequently sentenced to 15 months in prison.
The complaint further alleges that after Hernandez was released from prison, a number of individuals for whom Hernandez assisted in preparing tax returns prior to her incarceration were selected for audit by the IRS. Hernandez attempted to represent several of these individuals before the IRS during their audits.
This case was prosecuted by Trial Attorney Matthew J. Kluge, with the assistance of IRS Revenue Agent David A. Gordon. The civil injunction order, to which Hernandez consented, was signed Monday by United States District Court Judge Phyllis J. Hamilton.