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Thursday, November 7, 2024

California man sentenced for fraudulent tax preparation causing $28M IRS loss

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Lisa O. Monaco Deputy Attorney General | Official Website

A California man, Salvador Gonzalez, has been sentenced to six years in prison for preparing false tax returns. Gonzalez operated Grace’s Lighthouse Resource Center Inc., a return-preparation business in Corona, for over ten years. During this period, he consistently claimed false deductions on thousands of returns, including charitable donations and medical expenses, which reduced the income taxes his clients owed.

Gonzalez also instructed clients to create sham corporations to fraudulently deduct personal expenses such as mortgage and utility payments as business expenses. This scheme resulted in fabricated losses that flowed through to individual tax returns, reducing their reported income taxes.

The fraudulent activities led to a tax loss of at least $28 million for the IRS. Besides his prison term, Gonzalez was ordered to serve one year of supervised release and pay $403,908 in restitution to the United States.

The announcement was made by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Martin Estrada for the Central District of California. The case was investigated by IRS Criminal Investigation.

Trial Attorney Lauren K. Pope from the Justice Department’s Tax Division and Assistant U.S. Attorney Eli A. Alcaraz prosecuted the case.

In line with a plea agreement, a civil complaint was filed against Gonzalez seeking to permanently enjoin him from preparing or filing federal tax returns or related documents for others. The complaint alleges that Gonzalez understated federal income-tax liability using a scheme harmful to various parties including his customers and the public.

Gonzalez consented to a civil judgment and permanent injunction yesterday.

Taxpayers are advised to remain cautious about unscrupulous tax preparers. The IRS provides resources on choosing a reliable preparer and recognizing scams on its website.

Over the past decade, the Justice Department has obtained injunctions against numerous unethical tax preparers; information is available on its website along with an alphabetical listing of those enjoined from promoting such schemes.

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