LawFuel.com – Legal Announcements – Mother and Son Sentenced for Preparing False Income Tax Returns and Making False Statements to Federal Agents
LOS ANGELES – February 23, 2009 – Catherine D. Tucker, Acting Special Agent in Charge for the Los Angeles Field Office announced that Alma J. Batson and son Kelcee L. Batson, operators of tax preparation business located in Riverside, California were sentenced in federal court yesterday by U.S. District court Judge Percy Anderson.
Alma Batson was sentenced to serve 12 months in custody followed by 1 year supervised release, and ordered to pay a fine of $6,000. She previously pleaded guilty to one count of Title 26 United States Code, Section 7206(2), aiding and assisting in the preparation of false income tax returns. Kelcee Batson was sentenced to serve 3 years probation, including a term of 6 months home detention and ordered to pay a fine of $5,000. He previously pleaded guilty to one count of Title 18 United States Code, Section 1001(a)(2), making a false statement in a matter within the jurisdiction of the executive branch of the government of the United States of America, specifically, the Internal Revenue Service.
According to the nine-count indictment, Alma Batson conspired to aide and assist in the preparation of false income tax returns for the years 2002, 2003, and 2004, in violation of Title 18 U.S.C. § 371 and Title 26 U.S.C. § 7206(2). Both Alma and Kelcee Batson were also charged with making materially false statements to Special Agents of the Internal Revenue Service when each stated that Alma Batson did not prepare tax returns at the tax preparation business, when in truth, as they both knew, she had prepared tax returns, in violation of Title 18 U.S.C. § 1001 (a)(2).
According to the indictment, beginning in or about April 10, 2003, and continuing to on or about April 6, 2006, in Riverside County, Alma Batson and an unnamed co-conspirator, and others, knowingly combined, conspired, and agreed to defraud the United States by impeding, impairing, obstructing, and defeating the lawful governmental functions of a the Internal Revenue Service, by deceitful and dishonest means.
As part of the conspiracy, Alma Batson, the unnamed co-conspirator, and others operated tax preparations business Enterprise Tax Service in Riverside, California wherein Alma Batson, the unnamed co-conspirator, and others, would charge clients a flat fee ranging from $45 to $125 for preparing their tax returns. Their clients dropped off their tax-related information, including, among other things, information relating to their taxable income, Schedule C businesses, itemized deductions, standard deductions, and tax credits, at the tax preparation business. On occasion, Alma Batson met face-to-face with clients to obtain their tax-related information.
Alma Batson then falsified or inflated, among other things, one or more of the following items on the clients’ tax returns:
1. Tax credits for child and dependent care expenses;
2. Hope and lifetime learning tax credits;
3. Deductions for charitable contributions;
4. Deductions for unreimbursed employment expenses;
5. Schedule C business losses;
6. Deductions for tuition and fees;
7. Schedule E rental real estate losses; and,
8. Tax preparer information.
To conceal Alma Batson’s tax fraud, she had other employees at the tax preparation business sign the tax returns that she had herself prepared.
Between tax years 2001 and 2004, Alma Batson and her employees prepared almost 500 fraudulent tax returns, leading to a tax loss of almost $1M. These returns that were prepared falsely in that they claimed inflated or completely false Schedule C business losses; deductions for charitable contributions; deductions for unreimbursed employee expenses, deductions for tuition and fees; and tax credits for child and dependent care expenses; and hope and lifetime learning tax credits.
As part of concealing Alma Batson’s involvement in preparing and filing fraudulent tax returns, in or about June 2005, Alma Batson and her son Kelcee Batson, made false statements to Special Agents of the Internal Revenue Service about each other’s involvement in inputting tax information and preparing tax returns at Enterprise Tax Service, in violation of Title 18 U.S.C. 1001(a)(2).
On December 8, 2008, Chastity N. Chapman, one of Alma Batson’s employees at the tax preparation business, was sentenced to 3 years probation for her role in delivering or causing to be delivered a false or fraudulent tax return to any officer or employee of the Internal Revenue Service, in violation of Title 26, United States Code, Section 7207. Chapman was sentenced before United States District Court Judge Margaret Nagle in the Central District of California.
“The majority of tax preparers are honest and prepare accurate tax returns for their clients, said Catherine D. Tucker, Acting Special Agent in Charge for the Los Angeles Field Office, IRS Criminal Investigation. “Those few dishonest tax preparers who circumvent our tax system risk prosecution and could face prison.”
DEFENDANT Case Number: CR08-00855
Alma J. Batson, San Bernardino, California
Kelcee L. Batson, San Bernardino, California
SUMMARY OF CHARGES
-Aiding and assisting the preparation of a false tax return in violation of Title 26, United States Code, Section 7206(2)
Maximum Penalties: Three years in prison and fine not to exceed $250,000.
-Conspiracy to Defraud the United States in violation of Title 18, United States Code, Section 371
Maximum Penalties: Five years in prison and fine not to exceed $250,000
-False Statement within the Jurisdiction of the Federal Government in violation of Title 18, United States Code, Section 1001(a)(2)
Maximum Penalties: Five years in prison and fine not to exceed $250,000
AGENCY
Internal Revenue Service, Criminal Investigation – Los Angeles Field Office
For more information regarding cases involving return preparer fraud, please visit www.IRS.Gov.
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