Cataula Tax Preparers Sentenced For Tax Fraud
G.F. “Pete” Peterman, III, United States Attorney for the Middle District of Georgia, announces that on November 21, 2017, Chief U.S. District Court Judge Clay D. Land sentenced Melissa Lowe, age 47, and her daughter, Bianca Lowe, age 29, for their roles in filing false tax returns with the Internal Revenue Service.
Melissa Lowe was sentenced to 24 months imprisonment and restitution in the amount of $440,000, followed by a year of supervised release. Bianca Lowe was sentenced to 9 months imprisonment and restitution in the amount of $78,687, followed by a year of supervised release. As a condition of their supervised release, both parties are prohibited from acting as tax preparation agents or seeking employment in any tax related field.
The evidence showed that from 2011-2013, Melissa Lowe owned and operated Priority Tax Service in Cataula, Harris County, Georgia. Bianca Lowe was an occasional employee of the business. This business primarily was engaged in filing federal and state income tax returns for individual taxpayers. The Lowes engaged in a sustained practice of filing fraudulent income tax returns designed to inflate their customers’ tax refunds. While the scheme was perpetrated in several ways, the most common method used by the Lowes was filing a “Schedule C” with each return, even when such a filing was unwarranted and/or unnecessary. A Schedule C is filed when a taxpayer must report small business gains or losses; the Lowes routinely would file a Schedule C showing that their client sustained large business losses, which offset the amount of tax owed, and therefore increased the tax refund to the client. In most cases, the Schedule C businesses were either non-existent or their losses were drastically overstated.
The scheme was discovered when the Internal Revenue Service (IRS) realized that Ms. Lowe’s business was filing Schedule C returns in a volume that was drastically higher than the national average for such businesses. As a result of this scheme, the total loss to the government was estimated at $440,000. Most of the individual taxpayers were unaware of the fraudulent filings, and will not be held accountable for the losses.
“Today’s sentencings should act as a deterrent for those who are thinking about helping others submit false tax returns,” said James Dorsey, Acting Special Agent in Charge, IRS Criminal Investigation. “We will continue to utilize our resources, work with our law enforcement partners and dismantle any of these tax preparation businesses who submit fraudulent tax returns.”
This case was investigated by agents representing the Harris County Sheriff’s Office, the Columbus Police Department, and the Internal Revenue Service. Assistant United States Attorney Mel Hyde prosecuted this matter for the government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.