Tax Preparer Sentenced After Filing 900+ False Income Tax Returns

tax preparer sentenced

A Chicago-area tax preparer has been sentenced to one year and one day in prison for preparing and filing over 900 false income tax returns. The Internal Revenue Service (IRS) said this has resulted in a loss of $1.3 million.

Vervia Watts, a resident of Lansing, Illinois, operated a tax preparation business in Illinois and other locations, where she orchestrated a sophisticated scheme to defraud the IRS. Between January 2017 and June 2023, Watts prepared and filed fraudulent income tax returns for her clients, falsely claiming education expenses and business income to secure larger refunds. Her scheme was lucrative, with Watts receiving at least $300 for each return she prepared.

The IRS paid out approximately $1.3 million in fraudulent refunds as a result of Watts’ actions. With over 900 false returns filed during the six-year period, the financial impact of her actions is significant, and the IRS will seek restitution of $1,349,314.

In addition to her prison sentence, U.S. District Judge Lindsay C. Jenkins for the Northern District of Illinois ordered Watts to serve one year of supervised release. This sentence serves as a warning to tax preparers and individuals who would engage in fraudulent activities, highlighting the severe consequences of such actions.

The U.S.  Department of Justice said the IRS Criminal Investigation conducted the investigation, and the case was prosecuted by Trial Attorneys Meredith Havekost and Regina Jeon of the Tax Division. Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division announced the sentencing.

This case is a reminder for small business owners and individuals to be careful when choosing a tax preparer. It’s important to do thorough research and select someone who is known for being honest and following tax laws.

Image: Envato

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Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.

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