Memphis Tax Preparer Sentenced To 18 Months In Federal Prison For Filing Falsified Income Tax Returns

Memphis, TN – The operator of Tara’s Tax Preparation Service has been sentenced to 18 months in federal prison for conspiring to defraud the Internal Revenue Service by filing false and fictitious income tax returns. There is no parole in the federal prison system.

Tara L. Mitchell, 42, of Cordova, TN was sentenced this afternoon by United States District Court Judge S. Thomas Anderson. Mitchell pled guilty on October 8, 2014 to conspiring to defraud the United States by receiving money for filing false income tax returns.

According to court documents, Mitchell owned and operated a tax return preparation business in Memphis in 2009. Mitchell prepared federal income tax returns that contained a combination of false, misleading and inaccurate statements in order to generate a larger income tax refund.

A number of the false returns prepared by Mitchell would contain two tax credits to increase the amount of income tax refund: the Earned Income Credit and the First-Time Home Buyers Tax Credit. In order to be eligible for the First-Time Home Buyers Tax Credit a tax payer had to meet certain requirements, one of them being that the home must be purchased after April 8, 2008 and before December 1, 2009. In several instances, the income tax returns prepared by Mitchell included the First-Time Home Buyers Tax Credit when the tax payer had not purchased a home during the required period.

Other false items contained in Mitchell’s prepared tax returns included Schedule C Income and Loss statements containing false information; the listing of dependents that the tax payer was not entitled to claim; false claims of Head of Household status; and false wage information.

Mitchell, who did not have an Electronic Filing Identification Number (“EFIN”) to file the income tax returns electronically, paid a fee to use the EFIN of another tax preparer.

Co-defendant Derrick M. Evans, 43, of Marion, Arkansas, who was sentenced in January 2015, would recruit tax payers for Mitchell, and on two separate occasions provided identity information that was used by Mitchell to prepare false income tax returns.

Once the tax return was completed and filed by Mitchell, a check for a Refund Anticipation Loan would be printed. Evans would then transport the tax payer to Memphis to sign the Refund Anticipation Loan check and Mitchell would pay that individual a portion of the proceeds in cash and deposit the remainder of the tax refund in a bank account she controlled.

Mitchell prepared approximately 13 false tax returns for the 2009 tax year. The IRS has determined that the tax loss attributable to the 2009 tax returns totals nearly $113,227, which Mitchell was ordered to repay as restitution to the IRS.

In addition to the prison sentence, U.S. District Judge S. Thomas Anderson order Mitchell to serve three years of supervised release and barred her from participating in the business of preparing tax returns while she is serving her sentence.

This case was investigated by the Internal Revenue Service – Criminal Division. The government’s case was prosecuted by Assistant U.S. Attorney Joseph Murphy, Jr.