The owner of a Vancouver, Washington tax preparation business has been sentenced to nine months in prison for tax fraud. Saul Valdez, who operated Conexion Latina, was also sentenced to four months of electronic home confinement by U.S. District Judge Benjamin H. Settle at the U.S. District Court in Tacoma.
Valdez misled his immigrant clients into believing their tax forms were accurately completed. Instead, between 2016 and 2018, he included false deductions and expenses on their returns to reduce their tax liabilities.
"This is a serious offense... deterrence drives this case," Judge Settle remarked during sentencing. "This sentence should be one that deters you and sends a message to you and others like you that there will be a real penalty, not probation, for this conduct."
U.S. Attorney Tessa M. Gorman stated: "This defendant built his business by obtaining inflated tax refunds for clients who had little understanding of the U.S. tax system." Some clients faced back taxes, fees, and penalties due to the false filings.
Adam Jobes from IRS Criminal Investigation's Seattle Field Office noted that Valdez exploited credits meant for low-income taxpayers: "Mr. Valdez abused credits designed to help low-income taxpayers, and his clients incurred over $23,000 in penalties along the way."
Court records show that Valdez used TaxAct and TurboTax software for preparing taxes. For the 2017 tax year alone, he falsely claimed expenses on 36 returns resulting in a $54,045 tax loss—an amount he has agreed to repay as restitution.
A statistical sample of 50 out of approximately 2,000 returns prepared by Valdez estimated the total fraud-related tax loss at $1,293,921.
The investigation was conducted by Internal Revenue Service Criminal Investigations (IRS-CI), with Assistant United States Attorney Kristine Foerster prosecuting the case.