International Tax Advisor Arrested For Helping To Conceal Over $100 Million Of Income For High-Net-Worth U.S. Taxpayers
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Stuart M. Goldberg, the Acting Deputy Assistant Attorney General for the Tax Division of the Department of Justice, announced today that WILLIAM DOONAN, an attorney who operated a tax preparation business in the Bronx, New York, was sentenced today to 24 months in prison by U.S. District Judge Vernon S. Broderick for preparing and filing thousands of false and fraudulent returns that claimed more than $6 million in bogus deductions. DOONAN pled guilty on November 1, 2016, before Judge Broderick to one count of aiding and assisting in the preparation of a false tax return, and one count of obstructing and impeding the due administration of internal revenue laws.
Acting Manhattan U.S. Attorney John H. Kim said: “William Doonan’s so-called ‘business’ didn’t prepare taxes, it manufactured lies and false tax returns that resulted in more than $1.8 million in lost revenue for the IRS. In filing thousands of federal tax returns, Doonan used his legal knowledge to circumvent the law. Thanks to the dedicated investigators of the IRS, he will be held to account for his criminal misdeeds.”
Acting Deputy Assistant Attorney General Stuart M. Goldberg said: “William Doonan used his status as an attorney to attract clients to his tax preparation business. But instead of performing honest and professional work, he routinely falsified their returns, adding more than $6 million in phony deductions and causing the IRS to incur more than $1.8 million in lost taxes. Doonan’s prison sentence today makes clear that those who prepare and file fraudulent returns face significant penalties.”
According to the allegations in the Information to which DOONAN pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:
DOONAN, a New York-licensed attorney since 1982, carried out a tax preparation business in the Bronx using the firm name “William Doonan, Esq.” Every year from 2010 through 2013, DOONAN prepared and filed between 3,000 and 5,000 federal tax returns with the Internal Revenue Service (“IRS”) for taxpayer-clients in exchange for a fee. Several thousands of these returns were false and fraudulent in that they attached Schedules C to the clients’ returns that reported “consulting” businesses the clients did not own, operate, or materially participate in, and business losses that the relevant clients did not incur. DOONAN also prepared returns that attached Schedules A that reported false medical and dental expenses, state and local taxes, home mortgage interest, gifts to charity, job expenses, and other miscellaneous deductions. Between tax year 2009 through tax year 2012, DOONAN included in excess of $6 million in these fabricated and inflated items on his clients’ federal tax returns. As part of his plea, DOONAN agreed that he caused a tax loss of between $1.5 and $3.5 million.
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In addition to the term of imprisonment, DOONAN, 69, of the Bronx, New York, was sentenced to one year of supervised release, ordered to pay $65,820 in restitution to the IRS, and ordered to pay a fine of $10,000.
Mr. Kim and Mr. Goldberg praised the outstanding efforts of IRS-Criminal Investigation in the investigation.
This case is being handled by the U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit. Special Assistant U.S. Attorney Jorge Almonte of the Department of Justice’s Tax Division is in charge of the prosecution.