Each time the new tax season rolls around, it seems like there’s yet another story involving tax evasion or some type of new tax scheme. This year is no different. Recently, the U.S. Attorney’s Office brought charges against two Bay Area tax preparers who allegedly committed a total of 36 different crimes. The two Alameda tax preparers are believed to have conspired to submit several dozen fake tax returns for the purpose of inflating the refunds owed to their clients.
Alleged Conspiracy Uncovered
Tax attorneys in Oakland have learned that Veronica Forbes and her mother, Delphine Blakely, were charged with filing false tax returns and conspiracy to defraud the Internal Revenue Service. These charges are much more serious than a filer’s tax problems. If convicted of these crimes, the two women may find themselves facing fines of up to $250,000 and as many as five years in federal prison.
Court records show that the charges against Forbes and Blakely relate to tax returns filed in 2014 and 2015. The prosecuting IRS tax attorney referred to 35 cases during which either Forbes or Blakely allegedly added fake information to a tax return. The two women worked on Harbor Bay Parkway in Alameda at Blakely’s Income Tax and Bookkeeping Service.
Computer Flags Suspicious Returns
Mercury News reported that Forbes and Blakely were investigated after a computer at IRS headquarters flagged suspicious returns coming out of their office. The software was created to red-flag any tax preparer who shows a refund rate of more than 50 percent for the returns they prepare in any one year. Blakely’s Income Tax and Bookkeeping Service far exceeded that percentage, with refund rates of over 70 percent in 2012 and over 80 percent in 2013 and 2014.
After the system flagged the returns, Big Brother sent an undercover agent to the tax service with documents that would show taxes owed to the government if processed correctly. The complaint against the two women states that the undercover agent was allegedly told that he would owe money, but that “one of those charity things” could be “added,” allegedly to reduce the amount owed or produce a refund. The undercover agent was told in so many words that once the return document was signed, the responsibility was on the taxpayer. Blakely allegedly “added” to the return a charitable contribution to the Salvation Army totaling more than $2,000, despite being told by the undercover agent that no money was given to charity that year, according to the complaint.
Blakely Allegedly “Felt Sorry” for Filers Who Owed Money
Following the undercover operation, agents interviewed some of Blakely’s other tax clients and identified an additional 35 returns that appeared suspicious. Eventually, Forbes and Blakely were also interviewed, and, according to the complaint, Blakely admitted that she “felt sorry” for filers who ended up with a tax bill and that she sometimes exaggerated their deductibles, such as by placing a “1” in front of a $500 amount for expenses. According to IRS Special Agent Cas Mar, Blakely said she is aware of being held to a higher standard, but wanted to “help” her customers.
Anyone with concerns about a suspicious tax return, or who thinks their return may not have been completed accurately, should contact an accountant or a tax lawyer in Alameda County.