Taxpayer beware - mail your own tax check in - John R. Dundon II, Enrolled Agent
7929
post-template-default,single,single-post,postid-7929,single-format-standard,bridge-core-3.0.1,qodef-qi--no-touch,qi-addons-for-elementor-1.5.3,qode-page-transition-enabled,ajax_fade,page_not_loaded,,qode_grid_1300,footer_responsive_adv,qode-content-sidebar-responsive,qode-theme-ver-28.7,qode-theme-bridge,qode_header_in_grid,wpb-js-composer js-comp-ver-6.9.0,vc_responsive,elementor-default,elementor-kit-269
 

Taxpayer beware – mail your own tax check in

Taxpayer beware – mail your own tax check in

TAX PREPARER PLEADS GUILTY TO FRAUD AND TAX EVASION
NEWS RELEASE SUMMARY – March 8, 2010

United States Attorney Karen Hewitt announced that today tax return preparer David Canales pled guilty before United States District Court Judge Thomas J. Whelan to one count of mail fraud, in violation of Title 18, United States Code, Section 1341 and one count of tax evasion, in violation of Title 26, United States Code, Section 7201 in connection with a scheme to defraud his clients out of more than $1 million.

According to the plea agreement, between 2001 and 2008, Canales operated a tax preparation and bookkeeping business in Chula Vista, California. Canales admitted that he controlled two bank accounts in the fictitious business names, “International Recovery Systems/IRS” and “Freight Transport Brokers/FTB.” Canales further admitted that he falsely represented to his clients that they owed substantial amounts of tax to the Internal Revenue Service and California Franchise Tax Board and directed his clients to write checks to “IRS” and “FTB.” In his plea, Canales admitted that instead of forwarding these checks and the tax returns to the IRS and FTB, Canales deposited the checks into his own “IRS” and “FTB” bank accounts and either did not submit the clients’ returns to the relevant taxing authority or submitted different returns showing little or no tax due and owing.

Canales admitted that he caused losses in excess of $1,000,000 and willfully evaded payment of income taxes on $457,653 in income he earned for the tax years 2003-2007.

United States Attorney Hewitt said, “Canales took advantage of his clients who thought they were hiring an honest tax specialist to assist them with complying with the United States tax laws. This case demonstrates just how careful the public must be when choosing a tax specialist.”

“Today’s guilty plea is an example of IRS-Criminal Investigation’s commitment to working together with the Inspector General’s Office of Tax Administration to investigate those tax preparers who take advantage of the American public,” said Leslie P. DeMarco, Special Agent in Charge, IRS-Criminal Investigation in the Los Angeles Field Office. “Those individuals who choose to undermine the integrity of our tax system, risk prosecution.”

“Paid preparers are a critical component in our system of tax administration,” said J. Russell George, the Treasury Inspector General for Tax Administration. “When preparers violate the law, they harm their victims and severely damage the credibility and reputation of the tax preparation community.”

A sentencing hearing is scheduled for May 24, 2010 at 9:00 a.m., before Judge Whelan.

DEFENDANT Case Number: 09cr2946W
David Canales Age: 53 Chula Vista, California

SUMMARY OF CHARGES

Count 1: Title 18, United States Code, Section 1341 (Mail Fraud)
Maximum punishment of 20 years’ imprisonment, a fine of $250,000, and three years of supervised release.

Count 16: Title 26, United States Code, Section 7201 (Income Tax Evasion)
Maximum punishment of 5 years’ imprisonment, a fine of $100,000, and one year of supervised release.

AGENCIES
Internal Revenue Service – Criminal Investigation
U.S. Treasury – Inspector General for Tax Administration



Share