The owner of a Deerfield accounting firm drew a prison term for preparing false tax returns—after he had already been tapped by the Department of Justice (DOJ) for the same thing in 2018.
53-year-old Gary Sandiego owned G. Sandiego and Associates in Deerfield. Unlike ghost preparers we discussed earlier, Mr. Sandiego had been in business for some time. Though he likely had an established clientele who trusted him, he created and filed false tax returns on their behalf, creatively adding deductions, manipulating expenses, and even energy credits. In 2018, the DOJ took him to court for tax fraud going back to 2011. He was fined $358,000, and ordered to cease conducting business as a tax preparer.
While that might seem like the end of the story—it is not. In February of 2023, Mr. Sandiego was indicted by a federal grand jury in Chicago and charged with 17 counts of tax fraud and making false statements. The charges relate to his activities as a tax preparer from the years 2014 through 2017. An Internal Revenue Service (IRS) criminal tax investigation found that Mr. Sandiego ignored the documents provided by his clients and falsified their tax returns without their knowledge. As a result, the IRS failed to collect $4,586,154 in due tax from his clients. In April of 2023, Mr. Sandiego pled guilty to the charges.
In October of this year, Mr. Sandiego was sentenced to 16 months in prison, along with restitution of $2,910,442 and supervised release following his term of incarceration.
And what of the other $2 million owed to the IRS? Regardless of whether a tax preparer deceives a client about the amount of tax they owe, or the amount of a refund they received—when the tax fraud comes to light, the taxpayer may be responsible for correcting their return, paying the correct tax, or reimbursing the IRS for an inappropriate refund.
Initially, the IRS fines tax preparers who prepare and file fraudulent tax returns. The first sign of IRS involvement is a notice letter identifying the problem and setting out a penalty. Penalties are carefully calculated on the span of tax years, the inflation rate, the number of violations and the particular violations committed.
If you are a tax preparer who receives such a notice from the IRS, you are allowed to authorize someone to speak with the IRS on your behalf. Do not ignore the notice and consider speaking with an experienced criminal tax attorney for strong legal help going forward.
Charged with a tax crime or facing a tax controversy? Our tax attorneys can help
From offices in Cleveland and Chicago, our tax group is focused on civil and criminal defense of those pursued by the IRS or who are already facing allegations. When you have tax questions, call 440-250-9709 or contact us online today.
