LOS ANGELES – July 23, 2008 – LawFuel – Legal Announcement Service – Debra D. King, Special Agent in Charge for the Los Angeles Field Office announced that Alma J. Batson and son Kelcee L. Batson, operators of tax preparation business located in Riverside, California were arrested earlier today. A grand jury sitting in Los Angeles yesterday handed down an indictment charging Alma J. Batson with federal tax charges, and other federal charges to include making false statements. The nine-count indictment alleges that Alma Batson conspired to aide and assist in the preparation of false income tax returns for the years 2002, 2003, and 2004, in violation of Title 18 U.S.C. § 371 and Title 26 U.S.C. § 7206(2). Both Alma and Kelcee Batson were also charged with making materially false statements to Special Agents of the Internal Revenue Service when each stated that Alma Batson did not prepare tax returns at the tax preparation business, when in truth, as they both knew, she had prepared tax returns, in violation of Title 18 U.S.C. § 1001 (a)(2).
According to the indictment, beginning in or about April 10, 2003, and continuing to on or about April 6, 2006, in Riverside County, Alma Batson and an unnamed co-conspirator, and others, knowingly combined, conspired, and agreed to defraud the United States by impeding, impairing, obstructing, and defeating the lawful governmental functions of a the Internal Revenue Service, by deceitful and dishonest means.
As part of the conspiracy, Alma Batson, the unnamed co-conspirator, and others operated tax preparations business Enterprise Tax Service in Riverside, California wherein Alma Batson, the unnamed co-conspirator, and others, would charge clients a flat fee ranging from $45 to $125 for preparing their tax returns. Their clients dropped off their tax-related information, including, among other things, information relating to their taxable income, Schedule C businesses, itemized deductions, standard deductions, and tax credits, at the tax preparation business. On occasion, Alma Batson met face-to-face with clients to obtain their tax-related information.
Alma Batson then falsified or inflated, among other things, one or more of the following items on the clients’ tax returns:
1. Tax credits for child and dependent care expenses;
2. Hope and lifetime learning tax credits;
3. Deductions for charitable contributions;
4. Deductions for unreimbursed employment expenses;
5. Schedule C business losses;
6. Deductions for tuition and fees;
7. Schedule E rental real estate losses; and,
8. Tax preparer information.
To conceal her involvement, Alma Batson, the unnamed co-conspirator, and others, listed the unnamed co-conspirator as the tax preparer on tax returns, even though they had been prepared by Alma Batson.
According to the indictment, during the period April 2004 through April 2006, Alma Batson, the unnamed co-conspirator, and others, prepared and caused to be filed six separate tax returns for individuals (unnamed in indictment) for tax years 2002, 2003, and 2004. These returns that were prepared falsely in that they claimed inflated ore completely false Schedule C business losses; deductions for charitable contributions; deductions for unreimbursed employee expenses, deductions for tuition and fees; and tax credits for child and dependent care expenses; and hope and lifetime learning tax credits.
As part of concealing Alma Batson’s involvement in preparing and filing fraudulent tax returns, in or about June 2005, Alma Batson and her son Kelcee Batson, made false statements to Special Agents of the Internal Revenue Service about each other’s involvement in inputting tax information and preparing tax returns at Enterprise Tax Service, in violation of Title 18 U.S.C. 1001(a)(2).
“By and large tax preparers are honest and prepare accurate tax returns for their clients, said Debra D. King, Special Agent in Charge for the Los Angeles Field Office, IRS Criminal Investigation. “Those few dishonest tax preparers who circumvent our tax system risk prosecution and could face a lengthy prison sentence.”
The Batsons were arraigned this afternoon before Magistrate Judge Stephen Hillman, Central District Court of California. Their detention hearing is scheduled for later today.
DEFENDANT Case Number: CR08-00855
Alma J. Batson, San Bernardino, California
Kelcee L. Batson, San Bernardino, California
SUMMARY OF CHARGES
Aiding and assisting the preparation of a false tax return in violation of Title 26, United States Code, Section 7206(2)
Maximum Penalties: Three years in prison and fine not to exceed $250,000.
Conspiracy to Defraud the United States in violation of Title 18, United States Code, Section 371
Maximum Penalties: Five years in prison and fine not to exceed $250,000
False Statement within the Jurisdiction of the Federal Government in violation of Title 18, United States Code, Section 1001(a)(2)
Maximum Penalties: Five years in prison and fine not to exceed $250,000
AGENCY
Internal Revenue Service, Criminal Investigation Division
An indictment itself is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
For more information regarding cases involving return preparer fraud, please visit www.IRS.Gov.
