Unregistered Tax Preparer Pleads Guilty to Defrauding the IRS of Over $175,000 through a Fraudulent Tax Return Filing Scheme

NY attorney tax prosecution
Title: I R S Criminal Investigation Special Agent Badge - Description: I R S Criminal Investigation Special Agent Badge

LOS ANGELES – A Las Vegas, Nevada, resident pleaded guilty today to engaging in a scheme to defraud the Internal Revenue Service of over $175,000 through the submission of fraudulent federal income tax returns submitted on behalf of his clients.

Patrick Nathaniel McCall, 39, who operated in Murrieta, California, as a paid income tax return preparer without registering with the Internal Revenue Service, pleaded guilty before United States District Judge Dolly M. Gee to two counts of aiding and assisting in the preparation of false income tax returns.

In a the plea agreement filed in connection with today’s proceeding, McCall admitted that, between 2012 and 2014, he knowingly prepared and submitted at least 29 federal income tax returns for clients on which he (a) did not identify himself as the paid tax preparer; (b) attached a Schedule C, Profit or Loss from Business form, that falsely claimed a net loss from a business supposedly owned and operated by the client; and (c) falsely claimed a tax refund due to the client. 

The tax loss resulting from the filing of these 29 false returns was at least $175,918. 

For example, McCall told one of the clients for whom he prepared the fraudulent tax returns that he could maximize her tax refund.  To that end, McCall attached a Schedule C to the returns he prepared for the client, which falsely showed a loss from operating a business.  The Schedule C included with the 2011 return identified the purported business as “Video Tech” and the one included with the 2012 return identified the business as “Consultant.”  The client never operated Video Tech, never told McCall that she received any income or incurred any expense from Video Tech or any consulting business, and never gave McCall any documentation of any income or expenses from these businesses or any other business.

At today’s hearing and in the plea agreement, McCall further acknowledged that he prepared approximately 517 other federal income tax returns for clients for the tax years 2011 through 2013 which similarly failed to disclose that he had prepared the returns, included Schedules C on which the client claimed substantial losses from a business, and resulted in refunds claimed of approximately $2,998,946.

McCall faces a statutory maximum sentence of 6 years in federal prison and a fine of $500,000 when sentenced by Judge Gee on May 29.  McCall may also be ordered to pay restitution of at least $175,918 to the IRS.

This case is the product of an investigation by IRS Criminal Investigation.  The case is being prosecuted by Assistant United States Attorney Ranee Katzenstein of the Major Frauds Section of the US Attorney’s Office in Los Angeles.

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