Presidential Tax Service Owner Ordered To Prison For Falsifying Returns

HOUSTON – Sharon Edwards Kitine, the former owner of a now defunct Presidential Tax Service in Houston, has been sentenced to federal prison for falsifying client returns, United States Attorney Kenneth Magidson announced today along with Lucy Cruz, special agent in charge of Internal Revenue Service – Criminal Investigation (IRS-CI). Kitine pleaded guilty April 29, 2012, and the tax service establishment she owned closed in March 2012 following her arrest.

Today, U.S. District Judge Vanessa Gilmore, who accepted the guilty plea, handed Kitine a sentence of 24 months in prison to be immediately followed by one year of supervised release.

The factual basis in support of the plea stated that Kitine claimed false deductions for Houston-area clients that fraudulently increased tax refunds by approximately $205,682 for tax years 2006 through 2011, and she was further ordered to pay that amount in restitution to the IRS.

Kitine was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future. However, the government stated its intention to seek Kitine’s immediate custody if she fails to truthfully file her own 2012 tax return by the due date of Oct. 15, 2013. At the hearing today, Kitine sought probation in order to immediately begin to repay the National Treasury for the harm she has caused. The United States responded by advising the court that, despite having served as a paid preparer for others for several years, the IRS had no record that Kitine had ever field a personal tax return prior to being charged in this case. Further, after permitted release on bond in March 2012, Kitine had a filed a 2011 personal income tax return as required by her conditions of release but failed to pay any of the taxes shown due with that return.

Court records indicated that on or about March 29, 2008, Kitine knowingly prepared and caused to be filed with the IRS a false 2007 U.S. Individual Income Tax Return – Form 1040 for taxpayers and fee-paying clients in need of tax return preparation services. Without consent of the taxpayers, Kitine included certain materially false deductions with the intention of generating an excessive federal income tax refund and causing a direct pecuniary harm of several thousand dollars to the IRS.

Specifically, Kitine knowingly and willfully included materially false deductions for a variety of Schedule C deductions as well as Schedule A deductions for home mortgage interest and real estate taxes even though the taxpayers rented their home. This tax return alone caused a loss to the U.S. Treasury in the approximate amount of $11,261.

Kitine also knowingly and willfully prepared and caused to be filed with the IRS another 28 false federal income tax returns for other clients for tax years 2006 through 2011 that generated excessive refunds based upon false and fraudulently inflated deductions and credits that caused another $194,421 in aggregate losses to the IRS.

The investigation leading to these charges was conducted by IRS-CI. Assistant U.S. Attorney Jimmy Sledge Jr. is prosecuting the case.