New York Attorney Sentenced to Prison for Filing Thousands of Fraudulent Tax Returns

A Bronx, New York attorney, who ran a tax preparation business, was sentenced to serve 24 months in prison today for filing thousands of fraudulent tax returns that claimed more than $6 million in bogus deductions, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Joon H. Kim for the Southern District of New York.

“William Doonan used his status as an attorney to attract clients to his tax preparation business,” said Acting Deputy Assistant Attorney General Goldberg. “But instead of performing honest and professional work, he routinely falsified their returns, adding more than $6 million in phony deductions and causing the Internal Revenue Service (IRS) to incur more than $1.8 million in lost taxes. Doonan’s prison sentence today makes clear that those who prepare and file fraudulent returns face significant penalties.”

William Doonan’s so-called ‘business’ didn’t prepare taxes, it manufactured lies and false tax returns that resulted in more than $1.8 million in lost revenue for the IRS,” said Acting U.S. Attorney Kim. “In filing thousands of federal tax returns, Doonan used his legal knowledge to circumvent the law. Thanks to the dedicated investigators of the IRS, he will be held to account for his criminal misdeeds.”

“Doonan wreaked havoc on the taxpayers whose returns he prepared,” said Chief Richard Weber of IRS Criminal Investigation (CI). “Return preparer fraud is a priority for IRS CI and we are committed to investigating and putting a stop to unscrupulous criminals who take advantage of their clients. But, taxpayers must be diligent too and be careful when choosing a return preparer. It is important to know that even if someone else prepares your return, you are ultimately responsible for all the information on the tax return.”

According to documents and allegations in the Information to which William Doonan, pleaded guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:

Doonan, 69, a New York licensed attorney since 1982, ran a tax preparation business in the Bronx using the firm name, “William Doonan, Esq.” Every year from 2010 through 2013, Doonan prepared and filed between 3,000 and 5,000 federal tax returns with the IRS for taxpayer-clients in exchange for a fee. Several thousand of these returns were fraudulent and reported bogus “consulting” businesses and business losses, while others claimed fake deductions based on false medical and dental expenses, state and local taxes, home mortgage interest, charitable donations and job expenses. In total, Doonan included more than $6 milion in fabricated and inflated items on his clients’ federal tax returns and caused a tax loss of more than $1.8 million.

In addition to the term of prison imposed, U.S. District Judge Vernon S. Broderick also ordered Doonan to serve one year of supervised release, to pay $65,820 in restitution to the IRS and to pay a fine of $10,000. Doonan previously pleaded guilty in November 2016 to aiding and assisting in the preparation of a false tax return and obstructing and impeding the due administration of internal revenue laws.

Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Kim praised special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte of the Tax Division, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.