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Local Tax Preparer Pleads Guilty to Tax Charges

January 18, 2012

St. Louis, MO - The United States Attorney’s Office announced today that Rahman Watson pled guilty to filing false tax returns.

According to court documents, between January 2007 and the present time, Rahman Watson owned and operated Watson Accounting and Services, LLC in St. Louis County. Watson prepared federal income tax returns on behalf of his clients, and by fabricating income, typically "household help" and Schedule C income, would position his client to receive refundable Earned Income Tax Credits to which they were not entitled.

Over the course of the scheme, Watson identified the "sweet spot" in the EITC table which, if earned, would not only result in no income tax due a taxpayer, but would also generate a sizeable tax refund, even though no tax was due and owing. In all, the investigation has uncovered 44 instances of such conduct resulting in loss to the government of $213,950.

RAHMAN WATSON, Florissant, MO, pled guilty to one felony count each of filing a false tax return and identity theft before United States District Judge John A. Ross. Sentencing has been set for April 19, 2012.

"IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority," said Stephen Boyd, Special Agent in Charge of IRS-Criminal Investigation. "We will aggressively pursue those who prepare false claims for refunds for the purpose of enriching themselves and defrauding the government and the taxpaying public."

Filing a false tax return carries a maximum penalty of three years in prison and/or fines up to $100,000; identity theft carries a maximum of five years prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

In addition to the criminal prosecution, Watson has agreed as part of his plea to agree to a civil enforcement action brought by the Department of Justice Tax Division, which will result in his debarment as a tax return preparer.

This case was investigated by IRS-Criminal Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.

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