California Tax Preparer Convicted of a Felony and Promises to Turn Over Names

A tax preparer was recently convicted in U.S. District Court, Eastern District for aiding and assisting in the preparation and presentation of a false and fraudulent tax return. The defendant, Sarad Chand, admitted preparing false tax returns with inflated or false tax credits or deductions, frequently through the use of claiming unreimbursed employee business expenses or by creating Schedule Cs with false business income and expenses. The IRS examined over 900 returns prepared by the defendant finding an understatement of tax of over $2.7 million. The defendant has agreed to provide a list of all customers for whom he prepared federal tax returns or claims for refunds since January 1, 2012.

The complaint alleged that Chand, and others working with him under the business name S. Chand Tax & Accounting Services, prepared tax returns that falsely claimed inflated or fabricated tax credits or deductions. The suit noted that Chand most frequently prepared returns that falsely inflated unreimbursed employee business expenses. Chand also created Schedule Cs (Profit or Loss From Business) with false income, while for other clients he created false losses or inflated expenses, according to the suit. According to the complaint, these fabrications served to improperly reduce the customers' taxable income and resulted in reduced tax liability or inappropriate tax refunds. Moreover, according to the complaint, Chand also led his customers to believe that he was a former Internal Revenue Service (IRS) employee, when he was not.

The suit alleged that the IRS had completed examinations of 919 of the approximately 8,155 tax returns Chand prepared from 2008 to 2012, and that nearly all of the examined returns resulted in a finding of deficiency or denial of a refund claim. The 886 returns found to be inaccurate had a total tax understatement of more than $2.7 million.

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