Appearing in Brooklyn federal court before U.S. Magistrate Judge Robert M. Levy on June 25, 2019, defendant Emerson Gamory, former operator of tax preparation service Emerson Gamory Income Tax Services Inc., pleaded guilty to three counts of felony tax crimes. Charges to which Gamory pleaded guilty included one count of filing a false tax return, which violates 26 U.S. Code § 7206(1), plus two counts of filing false income tax returns on behalf of clients, an offense commonly known as “tax preparer fraud” or “aiding and assisting a false return,” constituting a violation of 26 U.S. Code § 7206(2).
By both filing on his own behalf and assisting others with the preparation of false tax returns, Gamory caused the U.S. government to sustain tax losses exceeding half a million dollars over a period of several years. Pleading guilty in federal court, Gamory admitted to preparing false returns for clients during the tax period from 2012 to 2016, during which time he knowingly submitted “returns… that included inflated or fictitious itemized deductions, such as gifts to charity and unreimbursed employee expenses, as well as tax credits for fabricated education expenses…”
As our tax defense lawyers have noted in the past, education credits are improperly claimed on such a frequent basis that they now receive special scrutiny from the IRS, which cautions taxpayers they may be charged fraud and accuracy-related penalties, plus be required to pay back – with interest – any credits “received in error.” In some cases, taxpayers can even be banned from attempting to claim certain education tax credits, with ban periods ranging anywhere from two to 10 years depending on the severity of the violation.
By submitting false information to the IRS, Gamory illegally lowered his clients’ tax liabilities. In addition, the inaccurate information caused the IRS to issue larger refunds than would have resulted from the filing of truthful returns. For legal ways to lower your tax liabilities, you should consult a trusted tax attorney about tax planning services for your business or personal finances. It is never in your best legal or financial interests to “cut corners” by working with potentially disreputable service providers.
In addition to filing false returns on behalf of other taxpayers – a serious criminal offense described at 26 U.S. Code § 7206(2) – “Gamory also prepared false tax returns for Gamory Tax that did not report all gross receipts,” along with personal “tax returns… that underreported net profits,” according to a Department of Justice press release.
With each charge subject to a maximum statutory sentence of three years, Gamory faces a sentence of up to nine years in federal prison. For those unfamiliar with the term, a “statutory” sentence is the sentence established by statute, or law, which in this case is “not more than 3 years,” in accordance with 26 U.S. Code § 7206. The Department of Justice noted that, in addition to sentencing, Gamory also risks fines and forfeiture, which is the seizure of assets that have been linked to criminal activity (such as assets connected with tax evasion).
Gamory’s case should warn tax professionals not to abuse their knowledge of the system. Otherwise, there can be harsh penalties – not only in terms of fines and incarceration, but furthermore, losing one’s license or practice. If you are a tax preparer, EA, or CPA facing tax fraud charges in San Francisco, Los Angeles, Oakland, or other parts of California, you should consult with the IRS tax attorneys at the Tax Law Office of David W. Klasing right away.
Our award-winning California tax attorneys have extensive experience providing assistance with criminal tax exposure for CPAs and other tax professionals. We can educate you on the steps a CPA should take to protect himself or herself in criminal tax matters – or if necessary, provide aggressive representation at trial. Contact us online immediately to arrange a reduced-rate consultation, or call the Tax Law Offices of David W. Klasing at (800) 681-1295 to speak with a tax evasion attorney today.
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