Tax Scheme Bust

⏱ 2 min read

Jamie Nevid Wallace, a Houston woman, has admitted to running a tax return scheme from 2017 to 2023, preparing false tax returns that included fraudulent Schedule A deductions and Schedule C business and education credits. Wallace, who owned Donahue Tax Service, operated as a ‘ghost preparer’ to conceal her involvement in the scheme, making it seem like clients were filing their own returns without assistance. She prepared false tax returns, generating refunds her clients shouldn’t have received, and charged fees for those returns.

As part of her plea, Wallace admitted to filing a false 2021 income tax return that included $68,453 in false Schedule A deductions, $36,852 in false Schedule C losses for a non-existent business, and a false education credit. These false entries resulted in a $18,075 tax loss. Wallace has taken responsibility for $244,824 in losses to the IRS and has agreed to pay that amount in restitution.

Wallace’s scheme was investigated by the IRS Criminal Investigation, and she is being prosecuted by Assistant U.S. Attorney Brad Gray. U.S. District Judge Alfred H. Bennett will impose sentencing on June 25, where Wallace faces up to three years in federal prison and a possible $250,000 maximum fine.

Wallace was permitted to remain on bond pending the sentencing hearing. The outcome of this case serves as a reminder of the consequences of tax fraud and the importance of honesty in tax preparations.