In a recent case, the owner of a tax preparation company in Downey has been sentenced to 2½ years in prison for committing fraud with hundreds of false tax returns. Raudel Sandoval, a licensed tax preparer and owner of RSE Sandoval España Inc., knowingly prepared nearly 400 fraudulent federal income tax returns between 2015 and 2018. By inflating his clients’ tax refunds without their knowledge and pocketing the difference, Sandoval caused a loss of over $750,000 to the IRS. He pleaded guilty to two counts of aiding and assisting in the preparation of false and fraudulent tax returns. Sandoval not only deceived his clients, but he also exposed them to potential consequences from the IRS. This case highlights the importance of choosing a trustworthy and reputable tax preparer during the tax season.
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Overview
This comprehensive article provides an overview of the case involving the owner of a tax preparation company in Downey, California, who was sentenced to 2½ years in prison for knowingly preparing hundreds of false tax returns. The article will delve into the background of the case, provide details of the fraudulent activities that took place, discuss the sentencing and restitution imposed on the defendant, and describe the tax preparation company involved. Additionally, the article will outline the false and inflated tax returns filed by the defendant, the misrepresentation made to clients, and the manipulation of bank accounts and refund processing. The article will also detail the losses incurred by the IRS as a result of these fraudulent activities. Finally, the article will conclude with tips for taxpayers on how to avoid unscrupulous tax preparers and utilize IRS assistance programs.
Background
Downey Tax Preparation Company Owner Sentenced to 2½ Years in Prison
In a recent case, the owner of a tax preparation company in Downey, California, was sentenced to 2½ years in federal prison. The defendant, Raudel Sandoval, knowingly prepared nearly 400 fraudulent federal income tax returns, resulting in a loss of more than $750,000 to the IRS. Sandoval inflated his clients’ tax refunds without their knowledge and kept the difference between the true refunds and the inflated ones.
Fraudulent Tax Returns
The fraudulent tax returns prepared by Sandoval involved false or inflated amounts of the child tax credit, business losses, short-term capital losses, and other items that the taxpayers were not entitled to. He falsified the tax returns with deductions and credits that his clients did not incur or had not informed him about. Sandoval also inflated the amounts of deductions and credits that his clients were allowed to claim.
Case Details
Loss of More than $750,000 to the IRS
Due to Sandoval’s fraudulent activities, the IRS suffered a loss of more than $750,000. Sandoval knowingly understated his clients’ tax liabilities for the tax years 2015 through 2018, causing a substantial financial loss to the government.
Raudel Sandoval’s Guilty Plea
Sandoval pleaded guilty to two counts of aiding and assisting in the preparation of false and fraudulent tax returns on March 22. His guilty plea acknowledged his involvement in the fraudulent activities described in the case.
Description of Fraudulent Activities
Sandoval, a licensed tax preparer and owner of RSE Sandoval España Inc., prepared numerous false federal and state income tax returns for his clients. He claimed false or inflated amounts of various credits, deductions, and losses on these returns, which the taxpayers were not entitled to. Sandoval falsified the tax returns without his clients’ knowledge and filed them with the IRS, resulting in inflated refunds. He then directed the inflated refunds to himself through various bank accounts under his control.
Sentencing and Restitution
Sentence of 30 Months in Federal Prison
United States District Judge Sherilyn Peace Garnett sentenced Sandoval to 30 months in federal prison for his involvement in the fraudulent activities. The sentence reflects the seriousness of the crimes committed and aims to deter others from engaging in similar fraudulent practices.
Order to Pay $758,550 in Restitution
In addition to the prison sentence, Judge Garnett ordered Sandoval to pay $758,550 in restitution. This restitution is intended to compensate for the financial losses suffered by the IRS as a result of Sandoval’s fraudulent tax return preparation.
RSE Sandoval España Inc.
Description of Sandoval’s Tax Preparation Company
Sandoval’s tax preparation company, RSE Sandoval España Inc., is based in Downey, California. The company provided tax preparation services to individuals and businesses in the area. Sandoval, as the owner, was responsible for overseeing the operations of the company and ensuring compliance with tax laws and regulations.
Ownership and Licensing
As the owner of RSE Sandoval España Inc., Sandoval was responsible for the licensing and registration requirements of the tax preparation company. It is essential for taxpayers to choose a tax preparer who is properly licensed and authorized to provide tax preparation services to ensure compliance with IRS regulations.
False and Inflated Tax Returns
Details of False and Inflated Claims Made on Tax Returns
Sandoval prepared false and inflated tax returns for his clients, claiming credits, deductions, and losses to which they were not entitled. These false and inflated claims resulted in larger refunds for the taxpayers than they were entitled to receive.
Tax Years 2015-2018
The fraudulent activities conducted by Sandoval spanned over the tax years 2015 to 2018. During this period, Sandoval consistently prepared false and inflated tax returns for his clients, resulting in significant financial losses for the IRS.
Misrepresentation to Clients
False Promises to File True-and-Correct Returns
Sandoval falsely promised his clients that he would file true-and-correct copies of their tax returns with the IRS. However, he instead filed false and fraudulent tax returns that included inflated deductions and credits. Sandoval deceived his clients by providing them with true and correct copies of their returns while secretly filing fraudulent returns on their behalf.
Inflating Refunds and Directing Payments to Himself
After preparing the false tax returns, Sandoval inflated his clients’ refunds and directed these inflated refunds to himself. He accomplished this by changing the bank account and routing numbers on the filed returns to his own bank account. Sandoval possessed control over multiple bank accounts, some opened in his clients’ names, which he utilized to facilitate his fraudulent scheme.
Multiple Bank Accounts and Third-Party Refund Processor
Control over Bank Accounts and Refund Processing
Sandoval had control over more than 100 bank accounts with various banks. He opened accounts in his clients’ names, but he was the only authorized signatory. Sandoval used these accounts to manipulate the processing of IRS payments and deposit the inflated refunds.
Manipulation of IRS Payments
To ensure that he received the inflated refunds, Sandoval directed the IRS to send the refunds through a third-party refund processor. By changing the bank account details on the filed tax returns, Sandoval succeeded in diverting the funds to his own account. In other instances, Sandoval arranged for the IRS to mail checks of the inflated refunds to his business address, which he subsequently deposited into one of his accounts.
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Losses to the IRS
Understated Tax Liabilities and Fraudulent Returns
Sandoval intentionally understated his clients’ tax liabilities on the fraudulent tax returns he filed. By doing so, he caused significant losses to the IRS. The fraudulent returns submitted by Sandoval concealed the actual tax liabilities of his clients, resulting in inflated refunds that were based on false and inflated deductions and credits.
Total Loss of $758,550
The fraudulent activities conducted by Sandoval led to a total loss of $758,550 to the IRS. This substantial financial loss demonstrates the magnitude of the fraudulent scheme orchestrated by Sandoval.
Number of Fraudulent Returns Filed
Sandoval filed at least 389 fraudulent income tax returns during the tax years 2015 to 2018. This significant number of fraudulent returns highlights the extent of Sandoval’s illegal activities and the impact it had on the IRS and his clients.
Tips for Taxpayers
Vigilance Against Unscrupulous Tax Preparers
In light of this case, taxpayers should remain vigilant when selecting a tax preparer. It is crucial to choose a reputable and trustworthy tax preparer to ensure compliance with tax laws and minimize the risk of involvement in fraudulent activities.
Choosing a Reliable Tax Preparer
Taxpayers should thoroughly research tax preparers before engaging their services. It is recommended to select a tax preparer who is licensed, authorized, and experienced in tax return preparation. References, reviews, and recommendations from trusted sources can aid in the selection process.
IRS Assistance Programs
The IRS offers various assistance programs that can help taxpayers accurately file their returns and avoid unscrupulous tax preparers. Taxpayers can access the IRS’s directory of federal tax preparers to find reliable professionals. Additionally, the IRS provides programs for free basic return preparation for qualifying seniors and individuals with low to moderate income. Taxpayers can also utilize IRS Free File, a public-private partnership that offers free online tax preparation and filing options for individuals with adjusted gross incomes below $72,000.
In conclusion, the case of the Downey tax preparation company owner being sentenced to 2½ years in prison highlights the importance of choosing a reputable tax preparer and being vigilant against fraudulent activities. The detailed overview of the case, including the fraudulent activities conducted, the sentencing and restitution imposed, and the losses incurred by the IRS, serves as a reminder of the potential consequences of engaging in fraudulent tax practices.
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