Kyle Baxter, Fraudulent Refund Scheme, WA, 2014

OLYMPIA, WA – A former Olympia tax preparer has been handed a two-year prison sentence for orchestrating a fraudulent refund scheme that defrauded clients out of over $250,000. Kyle Baxter, 31, pleaded guilty to the charges in July 2014 and was sentenced by U.S. District Judge Robert J. Bryan in Tacoma yesterday.

Bryan described Baxter’s actions as ‘evil and criminal,’ noting that the offenses not only targeted his clients but also harmed the public interest. According to court records, Baxter operated under the guise of ‘Baxtax’ from 2010 through 2013, filing at least 280 tax returns without a valid Preparer Tax Identification Number.

Baxter, who was also a firefighter during this period, claimed deductions and credits for his clients that were clearly ineligible, such as child tax credits for individuals without children. The fraudulent filings led to increased refunds from the IRS, which Baxter then siphoned off to himself. He was able to steal at least $250,000 through these deceptive means.

In addition to the prison sentence, Baxter has been ordered to pay $255,033 in restitution to the Internal Revenue Service. The case was investigated by the IRS-Criminal Investigation unit and prosecuted by Assistant United States Attorney Rebecca Cohen.

Baxtax’s clients included fellow firefighters, emergency medical technicians, and paramedics, many of whom were unaware of the fraud being committed in their name. This case serves as a stark reminder of the importance of due diligence when selecting tax preparation services.

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