Owner of Burley Income Tax Preparation Business Sentenced for Preparing Falsified Income Tax Returns for Clients

BOISE – Cruz “Kelly” Chacon, 42, of Burley, Idaho, was sentenced yesterday to 18 months in federal prison, followed by one year of supervised release, for assisting, advising, and counseling clients to submit materially false federal income tax returns to the IRS, U.S. Attorney Wendy J. Olson announced.  Chief U.S. District Judge B. Lynn Winmill also ordered Chacon to pay $81,384.00 in restitution.  Chacon pleaded guilty on February 22, 2016.

According to the plea agreement, 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 Chacon to generate business.      

“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,” U.S. Attorney Olson said.  “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.”

The case was investigated by the IRS Criminal Investigations division.