Former IRS Employee Pleads Guilty to Tax Fraud and Social Security Fraud

BOSTON – A former Internal Revenue Service (IRS) employee pleaded guilty today in federal court in Boston to filing false tax returns in order to fraudulently obtain tax refunds and stealing Social Security benefits.

Kathleen Mannion, 58, of Lawrence, pleaded guilty to four counts of aiding and assisting in the preparation and filing of a false tax return and one count of theft of government money.  U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Sept. 3, 2025. Mannion was charged in March 2025.

From 1998 to 2009, Mannion worked as an IRS contact representative in Andover, Mass. Between approximately July 2020 through April 2023, Mannion prepared and filed income tax returns for other individuals with the IRS. Even though Mannion prepared these returns on behalf of other individuals, she did not list herself as the tax return preparer.  Instead, Mannion prepared the returns to appear as if the taxpayers prepared the returns on their own. Further, Mannion listed ineligible dependents on the tax returns, resulting in higher refund amounts for which the taxpayers did not qualify—all without the knowledge of the taxpayers.  Mannion also filed forms with the IRS directing that a portion of the fraudulently obtained tax refunds be deposited in her personal bank accounts, which she then used for her personal benefit.

Separately, between April and October 2020, Mannion applied for Social Security retirement, spouse and widow benefits with the Social Security Administration (SSA) via telephone for other individuals. Unbeknownst to these beneficiaries, Mannion directed SSA to deposit the Social Security benefits in her personal bank accounts, which she also used for her personal benefit.

The charge of aiding and assisting the preparation and filing of a false tax return provides for a sentence of up to three years in prison, one year of supervised release and a fine of up to $250,000. The charge of theft of government money provides for a sentence of up to 10 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Leah B. Foley; Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office; and Amy Connelly, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division made the announcement. Assistant U.S. Attorney John T. Mulcahy of the Public Corruption and Special Prosecutions Unit and Special Assistant U.S. Attorney James J. Nagelberg of the Major Crimes Unit are prosecuting the case.