Two defendants sentenced in St. Louis tax fraud case

On Behalf of | Nov 25, 2013 | White Collar Crimes |

The federal tax code is packed with provisions offering various tax credits and deductions. Both individuals and businesses naturally want to make use of these as much as possible in order to minimize taxes.

Sometimes, however, individuals or businesses can cross the line from aggressive tax strategy to conduct that puts criminal charges into play.

In a recent St. Louis case, for example, federal prosecutors charged the owner of a tax preparation business and four employees of the business with committing tax fraud concerning a certain tax credit. In this post, we will discuss the status of this case.

The tax credit in question is the American Opportunity Tax Credit. This is a tax credit intended to promote access to college for people from moderate or low-income families.

In October 2012, authorities arrested the owner of a tax preparation business and four employees of the business. Authorities charged all five with participating in a conspiracy to make false claims of eligibility for clients of the tax prep firm for the tax credit.

Prosecutors contended that the business had falsely claimed the credit for clients 47 times in 2009.

In July of this year, the owner of the business pleaded guilty to conspiracy and to aiding and abetting tax fraud.

Last week, this owner, who also supervised tax preparers at the business, was sentenced to a 20-month federal prison term. One other defendant was also sentenced; she received six months.

The other three defendants who faced charges in the case have all pleaded guilty. Those three defendants, however, have not yet been sentenced.

Source: St. Louis Post-Dispatch, “Owner of St. Louis tax prep franchise gets 20 months for fraud,” Nov. 19, 2013


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