Prince George’s County Tax Preparer Pleads Guilty to Concocting False Tax Returns
Greenbelt, Maryland - Tammy P. Royster, age 41, of Upper Marlboro, Maryland, pleaded guilty today to six counts of aiding and assisting in the preparation of false income tax returns.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge C. André Martin of the Internal Revenue Service - Criminal Investigation.
“Tax return preparer fraud is like a contagious disease, it affects not only the preparer, but the individuals who have filed false information with the Internal Revenue Service,” stated C. André Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington DC Field Office. “At the IRS, protecting taxpayer money is a matter we take extremely seriously.”
According to Royster’s plea agreement, from about 2002 to about 2007, Royster owned and operated a tax return preparation business known as Nevets Tax Services (Nevets), which during its existence was located at several different locations, including 8841 Annapolis Road in Lanham, Maryland. During that time, Royster assisted numerous taxpayers in minimizing their tax liability by fabricating or inflating expenses, deductions and credits claimed on their individual income tax return, including education credits or tuition fees, charitable contributions, unreimbursed employee expenses and losses associated with a business.
For example, on April 20, 2007, Royster prepared a false 2006 individual income tax return for an IRS undercover agent (UC) that included $16,679 of fictitious Schedule A expenses, including $5,555 of charitable contributions, $1,409 of education credits and $9,715 of unreimbursed employee expenses. The UC did not provide Royster with any information about these Schedule A expenses. That return claimed a refund of $2,268.
Royster also routinely overstated cash and non-cash charitable contributions in excess of the amounts her clients reported to her. In some cases, when clients did not have businesses, Royster simply appended a fraudulent Schedule C to the return and created false income and expense figures to allow the client to claim a loss from the business on their returns. These false deductions and expenses lowered Royster’s clients tax liabilities, resulting in substantially larger refunds than the clients were entitled to receive. Royster thus enhanced her reputation and obtained new clients. From 2005 to 2007, Royster filed fraudulent income tax returns that resulted in a tax loss of $228,343.
Royster faces a maximum sentence of three years in prison on each of the six counts. U.S. District Judge Alexander Williams, Jr. has scheduled sentencing for July 28, 2010 at 9:30 a.m.
United States Attorney Rod J. Rosenstein commended Assistant United States Attorney Bryan E. Foreman, who is prosecuting the case.