New Jersey Tax Preparer Arrested for Alleged Fraudulent Claims of Over $124 Million

A New Jersey tax preparer has been arrested over alleged fraudulent claims for COVID-19-related employment tax credit. Leon Haynes, of Teaneck, New Jersey, allegedly sought over $124 million from the IRS by submitting over 1,000 fraudulent tax returns.

Throughout the pandemic, Congress licensed an worker retention tax credit score referred to as the “worker retention credit score” (ERC) to assist small companies scale back the employment tax they owed to the IRS. One other credit score was additionally licensed to compensate companies for wages paid to workers who had been unable to work on account of COVID-19, referred to as the “paid sick and household go away credit score.”

In keeping with courtroom paperwork, Haynes allegedly exploited these applications designed to assist small companies severely impacted by the pandemic. From November 2020 to Might 2023, performing as a tax preparer, Haynes is alleged to have ready and submitted roughly 1,387 false varieties to the IRS claiming COVID-related tax credit on behalf of himself and his shoppers.

The grievance alleges that Haynes advised his shoppers that the federal government was distributing COVID-relief cash for companies and that they had been eligible just because they operated a enterprise. With out consulting together with his shoppers, Haynes then allegedly submitted varieties to the IRS on behalf of their companies that grossly overstated the variety of workers and the quantity of wages paid.

Haynes allegedly submitted equally false varieties for 3 of his personal corporations. Based mostly on these misrepresentations, Haynes’ conduct allegedly sought roughly $124,751,995 in tax refunds on behalf of his corporations and quite a few different companies in his shoppers’ names.

Consequently, the IRS allegedly mailed Haynes a number of tax refund checks totaling $1,007,966 for his personal corporations. In complete, the IRS allegedly disbursed $31.6 million in refunds to Haynes’ shoppers and himself primarily based on the false tax varieties that Haynes submitted. The grievance additionally alleges that Haynes charged his shoppers a price of as much as 15% of the refund they obtained.

If convicted, Haynes faces a most penalty of three years in jail for every depend of aiding and helping within the preparation of a false return and 20 years in jail for mail fraud.

The case underscores the necessity for small companies to train due diligence of their dealings with tax preparers, notably during times of emergency reduction, to make sure that all claims and filings are authorized and legitimate.

Picture: Envato Parts

This text, “New Jersey Tax Preparer Arrested for Alleged Fraudulent Claims of Over $124 Million” was first printed on Small Business Trends