Tax Ghost Nabbed: $2.1M Fraud

⏱ 3 min read

Tracey Hernandez, 39, of Burlington, North Carolina, is trading her tax prep software for a federal prison jumpsuit. The IRS-CI busted Hernandez for a brazen $2.1 million tax fraud, and a judge handed down a 25-month sentence today. She ran the scheme in 2021 and 2022, filing hundreds of bogus tax returns for unsuspecting clients.

Hernandez operated as a “ghost preparer,” avoiding any paper trail that linked her to the fraud. But the feds spotted suspicious patterns in the filings. The investigation revealed she cooked the books, fabricating education expenses, inventing business losses on Schedule C forms, and illegally claiming sick and family leave credits for her clients – all to inflate refunds.

Over 200 fraudulent 1040 forms were traced back to Hernandez, who pleaded guilty in September 2025 to one count of aiding and assisting in the filing of a false tax return. It wasn’t worth trying to hide. The scheme quickly unraveled once the IRS-CI started digging.

Hernandez isn’t just facing time. The court ordered her to pay restitution of $2,106,281, meaning she’ll be paying back every penny she stole. Assistant U.S. Attorney Ashley Waid handled the prosecution for the Middle District of North Carolina.