Woman Pleads Guilty to Preparing False Income Tax Return

HOUSTON – A local tax return preparer has entered a guilty plea to willfully aiding and assisting in the preparation of a false tax return for a client, announced Acting U.S. Attorney Abe Martinez.

In the plea agreement filed in the record of the case, Crystal T. Kemp admitted she prepared income tax returns for clients of her business in Houston named CQ Tax Preparation. Kemp willfully placed several false items on the tax returns, including false losses from sole proprietorships, false refundable American Opportunity Credits, false earned income credits and false child tax credits.

“Kemp abused her knowledge of the tax system to defraud the U.S. Government and her clients through tricking them into signing documents to support her fraudulent scheme,” said Goss. “IRS-CI is and always will be committed to uncovering all types of schemes used by unscrupulous return preparers to harm the American taxpaying public.” 

According to the plea agreement, Kemp admitted she prepared 41 false income tax returns for clients with a combined tax loss to the United States of $429,131. Kemp also prepared a false 2015 income tax return for an undercover IRS agent posing as a taxpayer, claiming a false income tax refund of $5,546 when the tax return should have reflected a tax due and owing of $1,270.       

Kemp further admitted in the plea agreement that she claimed a false income tax refund on her 2013 and 2014 personal income tax returns that resulted in a combined tax loss to the United States of an additional $96,608. 

U.S. District Judge Sim Lake accepted the plea and has set sentencing for January 19, 2018. At that time, Kemp will face up to three years in federal prison and a possible $250,000 maximum fine. She was permitted to remain on bond pending that hearing.

IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorney Justin R. Martin is prosecuting the case.