Federal Judge Sentences Tax Preparer to 12 Months in Prison for Filing False Returns
BIRMINGHAM -- A federal judge today sentenced a former Birmingham tax-return preparer to 12 months in prison and ordered her to repay $44,080 to the Internal Revenue Service for filing false returns, announced U.S. Attorney Joyce White Vance and IRS, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge R. David Proctor sentenced KRISTIE E. SYKES on two counts of aiding in the preparation of a false return. Sykes, 44, of Birmingham, pleaded guilty to the charges in September. Sykes worked at the the now-defunct tax preparation business, VIP Tax Services, on Bankhead Highway in Birmingham. Proctor ordered Sykes to serve a year of supervised release following her prison term. Among special conditions of that release, the judge ordered Sykes to pay the restitution to the IRS and to refrain from assisting or aiding others in the preparation of taxes.
Sykes must report to prison July 15.
According to court records, Sykes orchestrated a tax refund scheme through VIP Tax Services. During the time Sykes professionally prepared tax returns, from 2008 to 2010, she filed false tax returns on behalf of taxpayer clients who retained VIP’s services, often including numerous false items on client’s returns in order to maximize their refunds.
Sykes pleaded guilty to two counts of preparing a false federal tax return while operating a tax preparation service by adding a false First-time Homebuyer Credit, a false dependent, false net losses and false deductions -- including for tuition and fees, medical and dental expenses, gifts to charity and job expenses, to clients’ returns.
In her plea agreement, Sykes also admitted to causing 11 false U.S. tax returns for 10 of her clients to be filed with the IRS for the tax years 2007-2009. Those returns contained fictitious dependents, inflated deductions, false income and expenses, and false education credits, and First-Time Homebuyer Credits or Residential Energy credits. Some of the false deductions and credits also enabled the defendant’s clients to falsely claim the Earned Income Credit, the Additional Child Tax Credit, and the Making Work Pay Credit. The total loss to the government was $49,411.
In a related case, JANICE FOY, 52, of Snellville, Ga., who owned and operated VIP, was sentenced in September 2014 to seven months in prison after pleading guilty to a two-count indictment charging her with one count of subscribing to a false federal tax return and one count of aiding in the preparation of a false return.
As part of their plea agreements, both women agreed to be permanently enjoined from aiding or assisting others in the preparation of taxes.
IRS-CI investigated the case, which Assistant U.S. Attorney Chinelo Dike-Minor is prosecuting.