East Bay Tax Preparer Accused of Tax Fraud over Three-Year Period

Dec 10, 2021 | Uncategorized

Accusations have been made against Traci Austin, a tax preparer in the East Bay area, alleging that she submitted false tax documents to defraud the government out of approximately $697,000. Federal prosecution documents were unsealed on Wednesday, according to a tax attorney in Oakland, and these documents stated that Austin helped others to prepare fraudulent tax returns. Austin is the proprietor of Emeryville Tax Services, just outside of Oakland, California. It is alleged that she used photographs of dogs to showcase a client’s nonexistent pet grooming establishment. In a sworn affidavit, it is also alleged that she set up a “tax school” to teach her methods to others in the field of tax preparation.

Fictitious Dependents and Inflated Statements All Part of Charges Against Austin

Internal Revenue Service agent Christine Stegner stated in the sworn affidavit that 44-year-old Austin submitted inflated statements of the expenses her clients incurred, prepared false documents, and added fictitious dependents over the course of three years for the purpose of reducing clients’ taxable income, as well as boosting her own fees. The latter ultimately came from her clients’ refunds.

Of 20 Clients Contacted, Some Were Unaware of Falsified Tax Documents

Agent Stegner stated that the IRS contacted 20 clients of Austin and discovered that a number of them were not aware that falsified documents were used when their returns were prepared and submitted. The agent referred to one case where the tax return claimed $16,000 worth of deductions from expenses for a dependent niece, as well as business losses. However, the IRS was told by the client that there was no dependent niece and that no business losses had occurred during that tax year.

Stegner cited a different case during which a tax customer told Austin that the IRS required evidence of a pet-grooming service and proof of subsequent business expenses. The client alleged that Austin told her to “print out some dog photos,” and that she would create a profit-and-loss statement for the grooming service. According to the IRS, this type of activity constitutes tax fraud.

East Bay Tax Fraud

Questionable “Tax School” Under Scrutiny

Beginning in 2016, Austin also ran a “tax school” for colleagues and tax preparers in her area, according to agent Stegner. It is not known if she consulted with any Bay Area tax attorneys prior to this endeavor. Participants were charged approximately $200 each and were told they could earn up to $90,000 in a single tax season if they learned and utilized her techniques.

Stegner stated that Austin taught those who enrolled in the class to prepare documents that itemized business losses and unearned income credits. It is alleged that she told her “students” to keep their tax clients out of the loop and not give them copies of the tax returns that were filed on their behalf.

“Double Dipping” Approach Allegedly Uncovered

In addition, the agent said that during a November 2019 session, Austin told those enrolled in her school how she helped a married couple obtain two head-of-household deductions by claiming there were two homes situated on the property when, in fact, the couple only owned a single home.

Austin was quoted as saying that she always attempts to acquire a bigger refund for her customers and is always looking for loopholes. She said, “That’s what I do.” An IRS tax attorney for Austin was not immediately available for a comment.

Anyone facing IRS tax problems should seek the advice of tax lawyers in Oakland by calling TaxHelpers at 510-907-7880 to ensure the best possible outcome for their situation.