Aurora Return Preparer Sentenced For Filing False Tax Returns
DENVER – Keith G. Smith, age 54, of Aurora, Colorado, was sentenced earlier this week to serve 9 months in federal prison by U.S. District Court Judge Raymond P. Moore for filing and assisting in preparing false tax returns, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. In addition, Judge Moore ordered Smith to pay $128,893.87 in restitution to the IRS. Smith was ordered by Judge Moore to report to authorities by 3:00 p.m. on the day of sentencing.
Smith was indicted by a federal grand jury in Denver on March 11, 2014. He pled guilty before Judge Moore on September 16, 2014. He was sentenced on Tuesday, December 9, 2014.
According to information contained in the indictment and plea agreement, beginning in 1987, Smith operated a tax return preparation business. He told some of his clients that he formerly worked for the IRS and conducted audits, seized assets, and carried a weapon. When in fact, for about four years Smith worked in an administrative positon at the IRS; he was not a criminal investigator, he did not conduct audits, and he did not seize assets. In 2000, the IRS assessed Smith a civil penalty because of underreported tax liabilities on returns that he had prepared for clients. Smith thereafter continued to prepare clients' returns but no longer signed them as preparer, instead indicating on the returns that they were prepared by the taxpayers.
Among the returns that Smith prepared for the years 2006 through 2010 were 40 false tax returns requesting refunds, in amounts ranging from $715 to $7,124, all of which the IRS paid. Many of the returns falsely claimed deductions for medical and dental expenses, home mortgage interest payments, education expenses, and charitable contributions. The false statements on the 40 returns resulted in a total tax loss of $138,148. In addition, Smith falsified his personal income tax returns for years 2008 and 2009.
This case was investigated by Internal Revenue Service – Criminal Investigation. Smith was prosecuted by the Economic Crime Section of the Criminal Division of the Colorado U.S. Attorney’s Office.