Wednesday, April 7, 2010

CHATTANOOGA, Tenn-- Demita Brown and Reginald Hadley, both of Chattanooga, Tennessee, have been charged in unrelated cases for tax fraud under Title 26 of the United States Code, Section 7206(2). Both individuals were professional tax return preparers operating in Chattanooga.

The felony Bill of Information against Brown, charges that on or about February 1, 2005, she prepared a false tax return Form 1040. It is alleged that the defendant falsely stated that the tax payer was due a refund in the amount of $5,087 when, as the defendant well knew, the tax payer was only due a refund of $538. No date has been scheduled for Brown to appear in court.

The felony Bill of Information against Hadley charges that on or about February 9, 2008, he prepared a false tax return Form1040 for the calendar year of 2007. It is alleged that the defendant falsely represented that the tax payers were due a refund in the amount of $9,719.00 based upon two Schedule C forms he prepared and which falsely represented that the tax payers had business expenses when, as the defendant well knew, the tax payers had no businesses and were entitled neither to a business expense deduction therefore nor to a refund.

The maximum penalty for each violation of the law is up to three years in prison, up to a $250,000 fine, up to one year of supervised release, and a mandatory special assessment of $100. The court may also order restitution up to the full amount of the tax loss.

The public is reminded that an information is a form of accusation and is not evidence of guilt. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This investigation was conducted by IRS Criminal Investigation. Assistant U.S. Attorney Gary S. Humble represented the United States.