Missoula Tax Preparer Sentenced for Tax Fraud

MISSOULA – Roy Eugene Baker, Jr., 71, of Missoula, MT, was sentenced today in Missoula federal court.  In July, Baker pleaded guilty before U.S. Magistrate Jeremiah Lynch to one count of Aiding or Advising a False Tax Return.  Chief U.S. District Court Judge Dana Christensen Sentenced Baker to five years’ probation and the payment of $11,768.24 in restitution.  Baker was initially charged by indictment with six counts of Aiding or Advising a False Tax Return and one count of False Statements to a Government Agency.

The IRS began investigating Baker and his tax preparation company, Bak-Tax Management Service, following a complaint by one of Baker’s clients that Baker had falsely inflated business expenses on the client’s tax return.  Two undercover IRS agents went to Bak-Tax to have tax returns prepared.  Baker prepared a return for one of the agents that included false business expenses in the amount of $4,433.  When the agent questioned Baker about the figure, Baker responded, “I gave you a few more supplies there.”

When subsequently questioned by the IRS about the cost of goods figure reported on the undercover agent’s tax return, Baker lied, stating that the figure had been supplied by the client.  An audit of all of Baker’s clients revealed $467,737 in underreported tax to the IRS.  The Government charged Baker based on $59,789 of criminal loss to the IRS from those clients whose records and testimony could prove beyond a reasonable doubt that Baker falsified their tax returns.  Baker’s methods included creating false schedule C businesses, inflating business expenses, and omitting income reported to him by his clients.  When some of Baker’s clients confronted him, he claimed ignorance and refused to help them with the audit process.  In its recommendation for sentencing, the United States noted that Baker’s actions resulted in a significant fraud against both the United States Treasury and his own clients, many of whom owed substantial amounts to the IRS as a result of Baker’s actions.

This case was prosecuted by Assistant U.S. Attorney Chad Spraker and investigated by the Internal Revenue Service.