A tax preparer in Corona is accused of filing fake tax returns for his clients, defrauding the IRS, authorities said.
CORONA, CA — A Corona resident was sentenced to serve six years in jail for his decade-long scheme of filing fraudulent tax returns for his clients, defrauding the IRS of at least $28 million, authorities said Tuesday.
Salvador Gonzalez received his sentence Monday and will have to pay $403,908 in restitution, according to the U.S. Attorney’s Office, Central District of California.
Gonzalez’s scheme began in 2013 when he opened Grace’s Lighthouse Resource Center, Inc., a tax preparation business under which he prepared thousands of returns for Corona residents.
Gonzalez would direct his clients to create a fake corporation and to title their homes, cars and other assets under it. Then, an associate would prepare a sham tax return for each of these corporations and ask clients to record fake business expenses in a spreadsheet.
Clients included personal expenses such as mortgage payments, car payments and utility bills. Prepared tax returns inevitably showed a loss, which trickled down to the clients’ income tax returns and fradulently reduced the amount of taxes each client paid, according to the Justice Department.
These fraudulent business losses offset clients income. Gonzalez also faked deductions on their returns, such as unreimbursed employee expenses, cash contributions to charity and medical and dental expenses. Due to these practices, his clients paid much less than they owed in taxes.
For these services, Gonzalez charged clients a flat fee of $500 per tax return. By 2019, he started charging clients 1% of their gross income as a fee for his services.
The complaint seeks to bar Gonzalez from preparing, assisting in, directing or supervising the preparation or filing of federal tax returns, amended tax returns or other related documents or forms for others, the Justice Department said.
Over the past 10 years, the Justice Department says it has obtained injunctions against hundreds of similarly fraudulent tax preparers.
“Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers,” the department said.
