U.S. Department of Justice
Peter F. Neronha
United States Attorney
District of Rhode Island
February 13, 2013
Rhode Island Tax Preparer Pleads Guilty to Violating Federal Court Order Barring Him from Preparing Tax Returns; Tax Evasion
PROVIDENCE, R.I. – Michael Brier, owner of the tax preparation firm Refunds Now Inc., based in Providence, R.I., pleaded guilty Monday in U.S. District Court in Providence to violating a federal court order permanently barring him from preparing tax returns for others. He also pleaded guilty to underreporting more than $1.1 million dollars in income between 2004 and 2009, and failing to pay nearly $400,000 in federal taxes.
Brier pleaded guilty to one count of criminal contempt and one count of tax evasion, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service (IRS), Criminal Investigation.
In November 2010, the court entered a preliminary injunction against Brier and his employees, after finding that at least 300 tax returns prepared by Brier and Refunds Now understated customers’ tax liabilities, and that Brier and his employees fabricated tax deductions and credits on the returns. Brier and his employees prepared approximately 24,000 federal income tax returns between 2003 and 2007. An IRS examination 350 of those returns determined that 92 percent of them required adjustments, resulting in a government-estimated loss of more than $1.1 million in tax revenue.
On March 7, 2011, the federal court ordered that Michael Brier and his employees be permanently barred from preparing federal income tax returns for others.
According to information presented to the court on Monday, on April 26, 2011, IRS Criminal Investigation agents executed a court-authorized search warrant at Brier’s tax preparation business, Refunds Now. During the execution of the search warrant, agents seized copies of tax returns prepared by Brier and several of his employees that were filed after the date of the permanent injunction. Agents also seized payment records and client communications establishing that Brier had continued to provide tax preparation services after March 7, 2011. IRS agents also interviewed numerous taxpayers who confirmed that Brier personally prepared and filed their federal tax returns after March 7, 2011.
At the time of his guilty plea on Monday, Brier admitted to the court that he underreported taxable income to the IRS between 2004 and 2009 totaling $1,152,679, and that he underpaid $399, 424 in taxes to the IRS.
Brier is scheduled to be sentenced on May 10, 2013.
There is no maximum penalty set forth for criminal contempt. At sentencing, the court has the power to punish by fine or imprisonment. The maximum fine allowed is $250,000, or twice the gross gain or gross loss, whichever is greater. The maximum term of supervised release is 5 years.
Tax evasion is punishable by a maximum sentence of up to 5 years in federal prison; a fine of $10,000, or twice the gross gain or gross loss, whichever is greater; and up to a maximum term of supervised release of 3 years.
The case is being prosecuted by Assistant U.S. Attorney Richard B. Myrus.