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Texas Man Indicted On Charges Related to a Tax Scheme to Steal CARES Act Funds

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July 10, 2020
Oregon Man Pleads Guilty to Federal Charges After Feds Uncover Illegal Refund Scheme
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Texas Man Indicted On Charges Related to a Tax Scheme to Steal CARES Act Funds

Texas Man Indicted On Charges Related to a Tax Scheme to Steal CARES Act Funds

According to a Department of Justice press release, a Texas man was recently indicted on charges of wire fraud, theft of government money, and aggravated identity theft. This story illustrates what not to do when facing the economic downturn caused by the COVID-19 pandemic. If you are a business owner who is struggling because of a slowdown in business, some relief may be gained by discussing your situation with an experienced business and tax attorney.

Defendant Alleged to Have Received Fraudulent CARES Act Economic Impact Payment

Prosecutors allege that James Mwanza gathered personal and identifying information from taxpayers and, holding himself out to be a tax preparer, filed false tax returns to benefit from fraudulent refund claims. Upon the filing of falsified tax returns, Mwanza is accused of pocketing the proceeds of refund checks sent by the IRS.

An element of the CARES Act, recently passed to help Americans get by during the COVID-19 pandemic, was the payment of $1,200 to each adult who made under a certain income threshold. Federal investigators and prosecutors allege that Mwanza benefited from such Economic Impact Payments because of his fraudulently filed tax returns.

Mwanza made his first appearance in federal court last week. If convicted, he could face up to 20 years in federal prison. In addition to a prison sentence, Mwanza also faces a sentence of supervised release and the payment of restitution to the IRS.

Seeking the Help of a Business and Tax Professional

Many businesses have suffered through the effects of the stay-at-home orders and reduced-capacity restrictions placed on many industries. The defendant in the story above is alleged to have taken matters into his own hands to profit on American taxpayers’ dime. There are various strategies that business owners can implement to survive, if not thrive, in the current COVID-19 reality.

With the assistance of an experienced business and tax attorney, you can lay out your particular business objectives and work toward developing a strategy to take advantage of particular CARES Act provisions that could help you achieve those objectives. For instance, profitable businesses may be entitled to carry back 2018, 2019, and 2020 losses up to five years and seek a “quick refund” using an expedited refund request. Furthermore, certain limitations on interest expense deductibility and other deductions that can lower taxable income have been temporarily turned off. An experienced tax attorney will be able to help identify which provisions your company can benefit most from.

We Are Here for You

Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine,  the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link.   Call our office and request a GoToMeeting if you are an existing client.