Jacksonville, Florida – Kenyan Shondre Scott has pleaded guilty to aiding and assisting another person with the filing of a fraudulent tax return and to filing a fraudulent tax return on his own behalf. He faces a maximum penalty of three years in federal prison on each charge. Scott has also agreed to pay $553,403 in restitution to the IRS for the tax loss caused by all of the offenses charged in the indictment, including those to which he did not plead guilty. A sentencing date has not yet been set.
According to the plea agreement, Scott was the owner and operator of a tax return preparation business in Jacksonville. In preparing income tax returns for others, Scott reported false information, including false claims for deductible expenses and losses, to reduce the amount owed by, or to increase the amount refunded to, the taxpayers. He then electronically filed these tax returns with the IRS, causing the IRS either to issue refunds when tax would have been owed, in the absence of the fraud, or for larger refunds to be otherwise issued.
Scott pleaded guilty to preparing and filing a fraudulent 2014 tax return for another individual in which he represented that the taxpayer had a business with $425 in income and $4,552 in expenses, resulting in a purported business loss of $4,127, and he subtracted this business “loss” from the taxpayer’s gross income. He also represented that the taxpayer was entitled to a general business credit of $2,850 and claimed this amount as a credit against the taxes owed by the taxpayer. When Scott made these representations, he knew that the taxpayer was a wage-earning employee of a corporation and did not operate a business in 2014.
After Scott filed the tax return, the IRS issued a refund of $2,734 to the taxpayer. In the absence of the false statements, the taxpayer would have owed additional tax of $738, meaning that the tax loss to the IRS was $3,472.
According to court documents, Scott prepared and filed a fraudulent 2014 tax return on his own behalf in which he represented that his filing status was single, that he had earned wages, salaries, and tips of $12,875, that he had net business income of $28,467, that he was entitled to a general business credit of $3,500, and that he had federal income tax withheld of $4,532. When Scott made these representations, he knew that his filing status should have been either married filing jointly or married filing separately, that he had not earned any wages, salaries, or tips, that he had net business income of approximately $297,110, that he was not entitled to a general business credit, and that he had not had any federal income tax withheld.
After Scott filed the tax return, the IRS issued a $50 refund to him. In the absence of the false statements, Scott would have owed additional tax of $108,033, causing a tax loss to the IRS of $108,083.
This case was investigated by the Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorney Arnold B. Corsmeier.
