Sisters-in-Law and Former Tax Preparers Plead Guilty to Tax Fraud Conspiracy
On Feb. 10, two former tax return preparers pleaded guilty in the U.S. District Court for the Middle District of Georgia to conspiring to defraud the United States by filing fraudulent tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.
According to court documents, from at least January 2008 through at least March 2010, sisters-in-law Angela Miller and Lee Lynwood operated a tax return preparation business and conspired to inflate their clients’ federal tax refunds by manipulating the tax returns to reflect false business income or loss amounts and to claim deductions and credits, such as the First-Time Homebuyer Credit, that the clients were not entitled to receive.
“The Department of Justice’s Tax Division, working with Internal Revenue Service-Criminal Investigation and the Offices of the U.S. Attorneys, is committed to prosecuting to the fullest extent of the law tax return preparers who willfully assist in the preparation and filing of false and fraudulent returns,” said Principal Deputy Assistant Attorney General Ciraolo.
Miller and Lynwood also took steps to continue their scheme by impeding the Internal Revenue Service’s (IRS) efforts to shut down their ability to electronically file tax returns. In May 2008, the IRS notified Miller and Lynwood that their Electronic Filing Number (EFIN) for filing electronic returns at their tax preparation business, A&L Tax Services, was being revoked. Miller and Lynwood then had an acquaintance apply for another EFIN in her name, which Miller and Lynwood used to continue to file fraudulent tax returns and conceal their preparation from the IRS. Further, Miller and Lynwood changed the name of their business to B&F Tax Services and caused a bank account for the B&F Tax Services to be opened in the acquaintance’s name as a nominee.
Miller and Lynwood filed false tax returns that claimed more than $130,000 in tax refunds during the course of the conspiracy. Miller and Lynwood each face a statutory maximum term of five years in prison, three years of supervised release and a fine of up to $250,000. Sentencing has not yet been scheduled.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the D.C. Office of Tax and Revenue Criminal Investigation Division, who investigated the case, as well as Tax Division Trial Attorneys Hayden M. Brockett and Alex R. Effendi, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office for the Middle District of Georgia for their assistance.
Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.