San Jose CPA Convicted Of Tax Fraud

SAN JOSE, Calif. – On August 16, 2013, a federal jury convicted Steven Frank Boitano with filing false tax returns, announced United States Attorney Melinda Haag and Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division.

According to evidence presented at trial, beginning in 2004, Boitano, a Certified Public Accountant and partner with the accounting firm of Boitano, Sargent & Lily, was responsible for preparing the tax returns for his firm. As a part of these responsibilities, Boitano prepared Schedules K-1, which detailed each partner’s share of the firm’s income, in addition to his tax return preparation duties and other accounting related responsibilities for his clients. Boitano’s gross income for the years 2001 through 2007 was at least $275,000 for each year.

Between the years 1991 and 2007, Boitano failed to timely file his individual federal income tax returns. Instead, for each of these years, he submitted a request for an extension of time to file his tax returns from April until August or October, including a payment with the extension requests. Thereafter, as the extended due dates for each year passed, Boitano failed to file his individual income tax returns.

Boitano was audited by the IRS at least twice between 1991 and 2007. In 1995, the IRS prepared Substitutes for Returns and made tax assessments on Boitano’s behalf for 1991, 1992 and 1993. Despite the contact with the IRS, Boitano continued to fail to file personal income tax returns. In 2005, the IRS again prepared a Substitute for Return and tax assessment on Boitano’s behalf for 2004. In June of 2009, the case was assigned to an IRS Revenue Agent. The Revenue Agent met with Boitano three times. During the third meeting, Boitano provided the Revenue Agent with signed married filing-jointly federal income tax returns [Forms 1040] for 2001, 2002, and 2003. On each of these returns, Boitano falsely and fraudulently reported making estimated tax payments of $26,000, $38,000, and $57,000, respectively. As a result of these fabricated estimated tax payments, each return claimed a refund to which Boitano was not entitled.

On the first day of trial, Boitano pleaded guilty in open court to Counts Four, Five and Six of the Indictment, charging him with failing to file federal income tax returns for 2005, 2006 and 2007. The Jury convicted him of counts One, Two, and Three of the Indictment, charging him with filing false tax returns for 2001, 2002 and 2003.

Boitano, 58, of San Jose, was indicted on August 25, 2011.

The maximum statutory penalty for each count of filing a false tax return, in violation of Title 26, U.S.C § 7206(1), is three years in prison and a fine of $250,000. The maximum statutory penalty for each count of failure to file a tax return, in violation of Title 26, U.S.C § 7203, is one year in prison and a fine of $100,000. However, any sentence following this conviction will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant United States Attorney Michael G. Pitman and Trial Attorney Charles O’Reilly of the Justice Department Tax Division are prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.