Kansas City, Kansas – A tax preparer has been caught in a fraudulent scheme, stealing from clients and cheating the U.S. tax system. Sonia Hernandez-Smith, a tax return preparer, pleaded guilty to aiding and assisting in the preparation of false returns. She admitted to putting false information on her client’s Schedule 8812, which is used to claim the Child Tax Credit. Hernandez-Smith obtained Individual Taxpayer Identification Numbers or ITINs for children she knew did not live in the United States, and whom were ineligible to claim the child tax credit. However, she put them as dependents on her client’s tax returns when her clients were not entitled to them. Lastly, she admitted to doing this for numerous clients.
As we approach the beginning of the tax return filing season, it is essential for taxpayers to be careful in selecting the tax professional who will prepare their return. The IRS does not want individuals to become victims of an unscrupulous return preparer. Each year, IRS-CI special agents and the U.S. Attorney’s Office investigate and prosecute return preparer fraud, which includes adding false deductions and credits in order to inflate refunds. This criminal activity affects taxpayers, but has serious consequences for the unscrupulous preparer.
Tax return preparers are vital to the U.S. tax system. As of tax year 2018, 55 percent of taxpayers used a paid preparer. Although most preparers provide honest and professional services, there is a small number of dishonest preparers who set up shop during filing season to steal money, personal and financial information from clients. Taxpayers can avoid falling victim to unscrupulous preparers by following important steps.
Tips when choosing a tax preparer include: looking for a preparer who is available year-round in case questions arise after the filing season, asking if the preparer has an IRS Preparer Tax Identification Number (PTIN), inquiring about the preparer’s credentials and checking their qualifications, asking about service fees, and never signing a blank or incomplete return and reviewing it before signing. Refunds should go directly to the taxpayer, not the preparer.
Hernandez-Smith’s sentencing is scheduled on May 17, 2021. The IRS Criminal Investigation St. Louis Field Office and the U.S. Attorney’s Office in the District of Kansas are committed to protecting Kansas taxpayers from others cheating the U.S. tax system.
The IRS wants to remind everyone to work with reputable tax preparers as we enter this filing season. Tax fraud costs U.S. taxpayers millions of dollars each year, and the U.S. Attorney’s Office will continue to hold those found to be behind these fraudulent claims accountable.
The nation’s tax season starts on Friday, February 12, 2021, when the agency begins accepting and processing 2020 tax year returns. U.S. persons are subject to tax on worldwide income from all sources. Most taxpayers meet this obligation by reporting all taxable income and paying taxes according to the law. However, those who willfully hide income should know that the IRS works across its divisions to ensure the highest possible tax compliance. Taxpayers found to be committing fraud may be subject to penalties including payment of taxes owed plus interest, fines and jail time.
Related Federal Cases
- Kalena Latoya Winston, Tax Return Fraud Scheme, Killeen TX, 2016 · Washington
- Kent Jay Trembly, Tax Return Filing Fraud, Nebraska 2024 · Nebraska
- Albert Davis, Wire Fraud, Kansas City, MO, 2023 · Texas
- Russell Hopkins, Securities Fraud Conspiracy, Kansas City MO, 2023 · Missouri
- Armando Jesus Hernandez Leal, $66M Investment Fraud, San Antonio TX… · Washington
Key Facts
- State: Kansas
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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