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In less time than it takes to get a college degree, the self-taught swindlers of today’s ”Fraud of the Day” learned to commit a massive tax refund fraud conspiracy involving false education credits. AL.com tells the story of a father and daughter team who used their tax preparation business to steal nearly half a million dollars from the Internal Revenue Service.

According to the story, the father owned a tax preparation service in Birmingham, Alabama. He was grooming his daughter, who was also trained to prepare taxes, to one day take over the business. (Apparently this meant training her to defraud taxpayers.)

The story states that over a two-year period of time, the duo filed hundreds of false tax returns with American Opportunity and Lifetime Learning Credits, designed to help taxpayers claim tax credits for tuition and education-related expenses paid during the tax year, on behalf of their clients without their knowledge. They also oversaw the preparation of fraudulent returns by other preparers. (Taxpayers beware: paid preparers are required to sign a return, but that fine print above your signature means that you have examined the form and all accompanying schedules.)

Both father and daughter pleaded guilty to tax refund fraud. As part of their plea agreements, the father was sentenced to two years in prison, while the daughter will serve a three-year probationary sentence, including six months under house arrest. Additionally, they were ordered to repay $490,328 in restitution to the IRS. (Let’s hope this experience educates these two tax preparers that there’s a zero-tolerance policy for tax refund fraud.)

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Birmingham father and daughter sentenced in $490k tax fraud,” written by Kent Fault and published by AL.com on November 19, 2015.

A father and daughter tax preparers were sentenced today for conspiring to defraud the government of $490,328 by falsely claiming education credits on their clients’ returns, federal authorities said.

Demetrius Young, 52, was sentenced by Chief U.S. District Judge Karon O. Bowdre to two years in prison. Deondra Young, 30, was sentenced by Bowdre to three years’ probation, including six months home detention, according to a statement from U.S. Attorney Joyce White Vance and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillott.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.