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New York State Department of Taxation and Finance Commissioner Robert L. Megna today announced that the two convicted owners and operators of a defunct Queens tax preparation business have been assessed $606,000 in fraud penalties for preparing and filing 585 bogus tax returns for tax years 2002 to 2004.
This civil penalty is the largest penalty the Department has ever imposed against paid tax preparers for filing fraudulent tax returns.
Those fined are Briseida Christopher, 65, of 433 Menahan Street, Brooklyn, the owner of Gypsy Travel, which was located in Ridgewood, Queens, and Juana DeCastro, 52, of 93-11 95th Street, Woodhaven, Queens, a tax preparer who worked in the Gypsy Travel office.
Both women pled guilty this summer to felony charges relating to the preparation and filing of false income tax returns.
Commissioner Megna said, "The Department is taking aim at fraudulent tax preparers who use their knowledge of tax administration and the tax law to game the system. Preparers who knowingly prepare false returns not only face arrest, but they will also be assessed $5,000 by the Department for each false return they prepare. In the coming months, the Department anticipates that similar fines will be imposed on other fraudulent preparers operating across the state."
Christopher and DeCastro were indicted in February 2007 and charged with multiple felony counts for filing fraudulent New York State personal income tax returns for clients and for themselves. They were also charged with surreptitiously charging their clients additional tax preparation fees - sometimes as much as $600 per client - through refund anticipation loans.
To generate false refunds, Christopher and DeCastro inflated their clients' itemized deductions and reported false business and rental losses. Christopher was sentenced on February 8, 2008 to time served and probation. DeCastro is scheduled to be sentenced in April 2008. She faces a maximum sentence of six months in jail and probation.
The criminal case was prosecuted by the office of New York State Attorney General Andrew Cuomo.
The Department's fraud penalties were issued pursuant to section 685(r) of the New York Tax Law which authorizes the Department to impose a $5,000 penalty upon paid tax preparers who knowingly assist taxpayers file false state tax returns to evade their tax responsibilities.
Guidance to Taxpayers:
Because taxpayers are responsible for the accuracy of the returns filed on their behalf, taxpayers need to exercise care in selecting tax preparers and in ensuring that the returns that they prepare only contain accurate data concerning the taxpayer.
The Department recently issued guidance to taxpayers who use paid preparers to help them prepare their tax returns. That guidance can be found at: http://www.tax.state.ny.us/press/2008/cautionadvised0208.htm.
Taxpayers are reminded that they are responsible for filing accurate returns and for paying the correct amount of tax on time. If your tax preparer led you to believe that your return does not have to be accurate, they are wrong and their advice can lead to civil and criminal penalties against both the preparer and the taxpayer. If you suspect a preparer of tax fraud, call the State Tax Department toll-free at 1-888-675-9437 or visit the Department's website at www.nystax.gov.
Taxpayers who have filed an inaccurate return prepared by a paid tax preparer should file an amended return with the correct information. Taxpayers who voluntarily disclose this information to the Department can avoid significant penalties by exposing the misconduct committed by their preparer and by aiding the Department in its investigation of that preparer.
Taxpayers can obtain tax assistance, information on the selection of a tax preparer and access to forms and assistance by visiting the Department's website: www.nystax.gov. and by visiting the IRS website: www.irs.gov.
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Last Modified: March 20, 2008
