Preparing a False Tax Return Lands Man in Federal Prison
|Jan. 4, 2013|
HOUSTON - Kermit Woods has landed in federal prison following his conviction for willfully aiding and assisting in the preparation and presentation of a false U.S. Individual Income Tax Return, United States Attorney Kenneth Magidson announced today along with Lucy Cruz, special agent in charge of Internal Revenue Service – Criminal Investigation (IRS-CI). Woods pleaded guilty to the charge March 30, 2012, at which time he admitted he owned and operated an income tax preparation business in Houston, known as L&L Finance.
Today, U.S. District Judge Gray H. Miller, who accepted the guilty plea, sentenced Woods to a 24-month-term of federal imprisonment which will be followed by one year of supervised release. Woods had previously agreed to pay restitution to the United States in the amount of $362,340, which is the amount of the tax loss on false income tax returns he prepared at L&L Finance during years 2004 through 2008. At the hearing today, Woods proved he had paid almost all of this restitution toward the tax loss on the tax returns he had prepared for others and intends to pay the remainder shortly.
As part of his plea agreement, Woods agreed to never again aid or assist in the preparing or presenting of tax returns for any taxpayer except himself. Woods also agreed not to oppose any civil action brought by the United States seeking to enjoin Woods from preparing income tax returns for others.
Woods also agreed that the relevant conduct the court will consider at sentencing should include an additional $346,479 that Woods did not report and pay with his own originally-filed income tax returns for years 2005 through 2008. The plea agreement notes that after Woods learned that he was under a criminal tax investigation, he filed amended his income tax returns for years 2005 through 2008 and paid the $346,479 in additional taxes for those years.
Woods further admitted in the plea agreement that in an attempt to conceal his income and assets from the IRS, he placed items he purchased in another’s name, including the home that he built for himself, his investment real estate, the title to his Jaguar automobile and the title to his boat. Woods admitted that he also had another person sign an assumed name certificate in Harris County, Texas, as though that person owned the income tax preparation business he operated.
Previously released on bond, Woods was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
This matter was investigated by IRS-CI and is being prosecuted by Assistant U.S. Attorney Charles J. Escher and by Department of Justice Tax Division Trial Attorney Tracy Gostyla.