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Ohio Tax Preparer Pleads Guilty to Filing False Income Tax Return, Assisting Illegal Immigrants

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    Appearing in court in August 2018, Fairfield, Ohio resident Janet Benitez, 44, pleaded guilty to filing a false income tax return, a felony offense prohibited under 26 U.S. Code § 7206 (fraud and false statements). In addition to concealing substantial income on her own personal tax return, Benitez, who provided tax preparation services out of her residence, also helped more than two dozen illegal immigrants prepare and file tax returns, improperly seeking tax refunds in the amount of approximately $124,000.

    Tax Preparer to Pay Over $265K in IRS Restitution After Filing False Return

    According to court records, Benitez, working out of her home, assisted a total of 28 illegal immigrants with tax preparation during the period from January 2011 to October 2016. In submitting the returns on behalf of her clients, Benitez improperly sought tax refunds well in excess of $100,000.

    In addition to seeking fraudulent tax refunds for others, Benitez also bent the law when filing her own income tax return, concealing and thus avoiding taxation on earnings totaling approximately $141,840.

    However, as our tax blog’s regular readers have repeatedly seen illustrated, taxpayers can seldom if ever hide income from the watchful eyes of the IRS for long – especially since the Service frequently collaborates with other state and federal agencies, such as the FBI, creating more opportunities for badges of fraud to be detected.

    Benitez, like most taxpayers who attempt to profit by committing tax fraud, was eventually apprehended by the authorities. Ryan L. Korner, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS-CI), said of the case, “Janet Benitez admitted to owning a tax preparation business that blatantly ignored the tax laws by preparing false tax returns.”

    After pleading guilty, Benitez agreed to pay the IRS court-ordered restitution in the amount of approximately $265,840. Benitez may also face a maximum prison sentence of three years, in addition to criminal fines of up to $100,000. These penalties are established by 26 U.S. Code § 7206, which criminalizes the act of willfully filing a false return, stating a person who commits this offense “shall be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 3 years, or both, together with the costs of prosecution.”

    As is true of many criminal statutes, 26 U.S. Code § 7206 actually defines several offenses, which are separate but related. For example, 26 U.S. Code § 7206(1), pertaining to declaration under penalties of perjury, makes it a crime to willfully file a tax return (“or other document”) that the taxpayer believes to contain “material” (significant) errors or omissions. By comparison, 26 U.S. Code § 7206(2), pertaining to aid or assistance, makes it a crime to help another taxpayer prepare and file a false return.

    Both definitions highlight “willfulness” – acting deliberately with intent to violate the law – as elements of each offense. For an in-depth discussion of this concept, readers may be interested in the willfulness requirement for tax evasion, how to respond to willful tax evasion charges, or defense tactics that make it harder to prove willfulness. The IRS has also addressed this issue in its own discussion of proof of willfulness.

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    Whether you are dealing with an IRS criminal investigation, or a civil tax audit that you fear has potential to escalate, it is in your best interests to contact us right away for assistance. While there are important differences between criminal investigations and civil audits, both place you at risk of incurring serious penalties. For assistance with a civil or criminal state or federal tax issue, contact the Tax Law Office of David W. Klasing online for a reduced-rate consultation, or call (800) 681-1295 today.

    Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.

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