Friday, March 1st, 2019 @ 11:19PM

CFEG reports that on May 12, 2017, in a federal district court in the Eastern District of New York, a former IRS employee was sentenced for filing false tax returns, aiding and assisting in the preparation of false tax returns, wire fraud, mail fraud, and perjury. The IRS employee pled guilty to the offenses in September 2016. https://www.treasury.gov/tigta/oi_highlights_2017.shtml

According to court documents, the IRS employee was a IRS revenue officer assigned to the Edison, New Jersey, IRS office. As a Revenue Officer, he was responsible for collecting money owed to the IRS and securing Federal tax returns from taxpayers who failed to file them. In connection with their employment, IRS employees are prohibited from preparing tax returns for profit and are prohibited from operating an outside business without prior written approval from IRS management. In addition to the criminal charges, this IRS employee violated these regulations by preparing fraudulent Federal tax returns for taxpayers in exchange for a fee and by operating a personal business selling items through eBay without proper approval. https://www.treasury.gov/tigta/oi_highlights_2017.shtml

Between 2010 and 2015, the IRS employee prepared nine fraudulent tax returns for others that contained false statements relating to dependents, filing status, itemized deductions, business profits or losses, and residential energy credits. These false statements on the tax returns either caused the clients to receive a refund when they otherwise would not have or caused inflated refunds. This IRS employee earned money preparing the returns by diverting a portion of the taxpayers’ refunds to bank accounts within his control. In some cases, the taxpayers believed he had prepared their tax returns as a favor and were unaware that he had diverted or attempted to divert a portion of their refunds to his bank accounts. https://www.treasury.gov/tigta/oi_highlights_2017.shtml

In furtherance of his scheme, for Tax Years 2011, 2012, and 2013, the IRS employee made fraudulent claims on his own tax returns, filed jointly with his current wife, claiming fraudulent dependents, underreporting the gross receipts of his eBay business, claiming false deductions, and failing to report money earned preparing tax returns for others. By making these false claims, he fraudulently reduced his taxable income and increased the amount of his tax refunds. Between January 2012 and February 2015, this IRS employee electronically filed 11 of the 12 fraudulent returns from Staten Island, New York, including two of his own. https://www.treasury.gov/tigta/oi_highlights_2017.shtml

According to the Government’s Sentencing Memorandum, although the IRS employee was not required to plead guilty to aggravated identity theft, he committed the offense on a number of occasions. He used at least nine different victims’ names and Social Security Numbers in order to falsely claim them as dependents on his own tax returns and returns he filed for others. The victims were people with whom he or his family had previous interactions, and they had entrusted him or his family members with their personal identifying information. Two victims worked for the IRS employee’s aunt, another victim previously dated his mother and this IRS employee had prepared the individual’s taxes, and yet another victim was the minor child of the IRS employee’s best friend. https://www.treasury.gov/tigta/oi_highlights_2017.shtml

This IRS employee also perjured himself by knowingly making false declarations to the U.S. Tax Court in 2012, while under oath. He had falsely claimed the First-Time Homebuyer Credit on his 2008 Federal return. This credit was established for taxpayers who purchased a new home in 2008, 2009, or 2010; however, taxpayers who owned a principal residence during the three years prior to the date of purchase of the new home were not eligible for the $7,500 tax credit. This IRS employee did not meet the eligibility conditions for the credit because he owned and used his Staten Island property as his principal residence until he and his wife at the time purchased a home in Avenel, New Jersey in 2008. After the IRS employee was notified that the IRS had disallowed the credit, he appealed the decision and a trial was held in U.S. Tax Court. During the trial, he lied, testifying under oath that he did not live in his Staten Island residence for any part of the three years prior to his purchase of the Avenel home. https://www.treasury.gov/tigta/oi_highlights_2017.shtml

The IRS employee was sentenced to six months’ imprisonment, followed by one year of supervised release and was ordered to pay restitution to the IRS in the amount of $73,548.00. Further, he is to refrain from engaging in any employment which involves the preparation or filing of income tax returns for anyone other than himself and must fully cooperate with the IRS regarding his returns, reporting all correct taxable income and claiming only allowable expenses. This IRS employee was scheduled to begin his sentence on June 26, 2017. https://www.treasury.gov/tigta/oi_highlights_2017.shtml

When IRS employees file false tax returns, aid and assist others in the preparation of false tax returns, commit aggravated identity theft, lie to the U.S. Tax Court, and falsely claim the First-Time Homebuyer Credit on Federal tax returns, the IRS fails in its mission to apply the tax law with integrity and fairness to all.

Posted by cfegov
Categories: 2017 CRIMINAL CONVICTIONS OF IRS EMPLOYEES, IRS Agents Defraud Government And Receive Bonuses, IRS Employees Engage In Tax Refund Identity Fraud, IRS Employees Pretend To Buy Houses To Steal New Buyer Tax Credit