A former Indiana tax preparer has been sentenced to 4 years in prison for his role in a massive tax fraud scheme that preyed on the financially disadvantaged and resulted in a loss of $1,501,000 to the Internal Revenue Service and American public.
David R. Franklin, 44, owner of 27 Instant Tax Service (ITS) tax preparation stores in the Indianapolis area, was sentenced to 48 months (4 years) imprisonment by U.S. District Judge Tanya Walton Pratt on Thursday, April 19, 2018. Franklin pleaded guilty to three counts of making and filing false tax reports.
According to the investigation, Franklin trained and directed his employees to prepare false and fraudulent federal income tax returns for multiple clients from 2010 through 2012. Specifically, Franklin counseled and advised his employees to prepare Form 1040 Schedule C forms reporting inflated business income or losses, which then resulted in unauthorized earned income credits and refunds for taxpayer clients of ITS.
As a result of these efforts by Franklin, more than 2,300 false federal income tax returns were filed by ITS between 2010 and 2012, resulting in a loss to the Internal Revenue Service and the American public of $1,501,000.
“Dishonest tax return preparers should take notice that your activities do not go unnoticed,” said Gabriel Grchan, Special Agent in Charge of IRS Criminal Investigation. “IRS Criminal Investigation is focused on protecting taxpayers by exposing unscrupulous tax return preparers through criminal prosecution and today’s sentencing is another example of these efforts.”
Franklin must also make restitution of $1,501,000 and serve three years of supervised release after his sentence. Assistant United States Attorney James M. Warden, who prosecuted this case for the government, said, “Mr. Franklin did not steal from an agency in Washington, he stole from his fellow citizen. Judge Pratt’s sentence demonstrates the seriousness of his offense.”
This case is a reminder that the IRS and law enforcement agencies are working together to protect taxpayers from unscrupulous tax return preparers and those who engage in other forms of tax fraud.
Franklin owned and operated 27 ITS tax preparation stores in the Indianapolis area, employing and training over 50 preparers. On August 8, 2013, United States District Judge Sarah Evans Barker granted a permanent civil injunction against Franklin and ITS, ordering Franklin and ITS from directly or indirectly preparing, filing or assisting in the preparation or filing of any federal tax return.
Key Facts
- State: Indiana
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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