Owner of Burley Income Tax Preparation Business Pleads Guilty to Preparing Falsified Income Tax Returns for Clients

BOISE – Cruz “Kelly” Chacon, 42, of Burley, Idaho, pleaded guilty yesterday in United States District Court to preparing false income tax returns for clients of her business, “Kelly’s Tax Service,” U.S. Attorney Wendy J. Olson announced. 

Chacon pleaded guilty to one count of assisting, advising, and counseling clients to submit materially false federal income tax returns to the IRS.  According to the plea agreement, the IRS estimates that from 2008 through 2011, Chacon and some of her employees at Kelly’s Tax Service submitted over 2,500 federal falsified income tax returns.  They did this primarily by claiming tax credits to which their clients were not entitled.  Specifically, Chacon and her employees would prepare tax returns that claimed the “child tax credit” and the “additional child tax credit” for taxpayers who did not qualify for these credits.  This had the effect of increasing clients’ tax refunds, which helped the defendant to generate business.  As part of her plea agreement, Chacon has agreed to pay $81,384.00 in restitution.      

Sentencing is set for May 9, 2016, before Chief U.S. District Judge B. Lynn Winmill.

“Those who intentionally submit falsified income tax returns to the IRS victimize all taxpayers because we all share the costs of paying for the improper tax refunds,” said Olson.  “We will continue to work closely with the IRS to root out this illegal activity, especially where a tax preparation business assists individuals in breaking the law.”

“Choose carefully when hiring a tax preparer and avoid tax preparers who claim they can obtain larger refunds than other preparers,” said Stephen Boyd, IRS Criminal Investigation Special Agent in Charge for the State of Idaho.  For tips on Choosing a Tax Professional go to www.irs.gov.

Advising, assisting, and counseling in the preparation of a false income tax return punishable by up to three years imprisonment, a $250,000 fine, a term of supervised release of one year, and a $100 special assessment. 

The case was investigated by the IRS Criminal Investigations division.