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Jan. 9, 2009

Tax Return Preparer Pleads Guilty

(Houston) - Dennis Lane Estes has pleaded guilty to one count of tax evasion for evading the taxes of one of his clients, in violation of Title 26, United Stares Code, Section 7201, acting United States Attorney Tim Johnson announced today. Estes operated an income tax preparation business named Tejas Income Tax Services.  

According to the plea agreement filed in the public record of the case, Estes had a client who hired Estes to prepare corporate and individual income tax returns for him for years 2001 through 2004. Each year, without the client’s knowledge, Estes filed corporate and individual income tax returns for the client with the Internal Revenue Service (IRS), falsely underreporting the amounts of taxable income on both and falsely understating the amounts of individual income taxes owed by the client. Each year, Estes gave the client a different set of corporate and individual income tax returns showing significantly more taxable income on both and significantly more individual income taxes owed by the client. Under the guise that Estes would deliver the alleged tax payments to the IRS for the client, Estes got the client to write a check to Estes’s income tax preparation business for the amount of taxes reflected on the individual income tax returns given to the client each year. Estes pocketed the alleged tax payments the client gave him.  

Estes also admitted in the plea agreement that he willfully filed false individual income tax returns for himself for years 2001, 2002, 2003 and 2005 and that Estes failed to file an income tax return for 2004. 

Estes admitted the total tax loss he caused the IRS was $296,306. United States District Judge Melinda Harmon set sentencing for April 3, 2009.

The crime of tax evasion under Title 26, United States Code, Section 7201, carries a maximum penalty of five years imprisonment, a fine of $250,000, costs of prosecution and three years of supervised release. 

This case was prosecuted by Charles J. Escher and was investigated by IRS – Criminal Investigations Division.

 

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