Tax Fraud Against Preparers Affirmed by the Fifth Circuit

The convictions of a couple that committed tax fraud were affirmed by the Fifth Circuit Court of Appeals. The husband and wife were the owners and operators of a firm that prepared personal income tax returns in Texas.

A husband and wife were indicted for offenses arising out of their business

of preparing federal income tax returns. The indictment alleged one count of

conspiring to defraud the United States by obstructing the collection of income

taxes and by assisting in the preparation of false income tax returns, see 18

U.S.C. § 371, and 25 counts of aiding and assisting in the preparation of false

income tax returns. See 26 U.S.C. § 7206(2). Thirteen of the counts charged the A husband and wife were indicted for offenses arising out of their business of preparing federal income tax returns. The indictment alleged one count of conspiring to defraud the United States by obstructing the collection of income taxes and by assisting in the preparation of false income tax returns, see 18 U.S.C. § 371, and 25 counts of aiding and assisting in the preparation of false income tax returns. See 26 U.S.C. § 7206(2). Thirteen of the counts charged the husband, while the remaining twelve charged the wife. A jury convicted themon every count.

Donald and Tonya Womack were the owners and operators of Front Door Tax Services, a small company that prepared personal income tax returns in Houston, Texas. Originally, Donald was the only person who prepared returns for the business. Donald misrepresented that he was an accountant who had worked previously for the IRS. As business grew, he sought assistance in preparing the returns from his wife, Tonya. The couple used the same electronic filing identification number (EFIN).

The IRS first noticed the Womacks based on the unusual deductions that were claimed on their clients' returns. Several of the Womack's clients testified against the couple, including one man who testified that Mr. Womack offered to provide false mileage logs to substantiate vehicle mileage deductions. Other former clients stated that they had never given the Womacks any information that would support the deductions that the couple claimed, such as charitable or mortgage-interest deductions. These clients are probably lucky they didn't get charged with tax evasion themselves!

The government also used an undercover IRS special agent, who brought in his tax information to the couple. Although he had calculated that he owed $300, the Womacks gave him a choice of three tax refund amounts, ranging from $3,200 to $4,200. Mrs. Womack claimed that, although she had taken a tax preparation course, all of her errors were accidental. Mr. Womack did not offer any theory as to the cause of his inaccuracies.

A jury indicted the couple on 26 counts of conspiracy and aiding and assisting in the preparation of false tax returns. Mr. Womack was ordered to serve five years in prison, plus three years of supervised release. Mrs. Womack got off with three years of prison time, plus three years of supervised release. The court also ordered them to pay over $160,000 in restitution. This is over and above any civil tax preparer penalties that may be assessed against them under Internal Revenue Code (IRC) Section 6694.The Fifth Circuit affirmed their convictions in an unpublished opinion.

Contact our experienced criminal tax attorneys at 800-Tax-Litigator for a confidential consultation to discuss available options if you have been contacted by the IRS in connection with civil or criminal tax fraud.

Contact our Experienced Criminal Tax Attorneys at Marini & Associates, P.A. for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).