OAKLAND – A federal criminal lawsuit unsealed today accuses Traci Austin of assisting and assisting in preparing fraudulent tax returns, said acting U.S. attorney Stephanie M. Hinds and Internal Revenue Service, Criminal Investigation and IRS Criminal Investigation Special Agent in Charge Mark H. with .Pearson.
The complaint describes Austin, 44, of Brentwood, California, as the owner of a tax filing company called Emeryville Tax Services (“ETS”). According to the complaint, Austin created materially false and fraudulent tax returns for its clients by recording false and / or excessive Schedule A expenses, false and / or excessive Schedule C income and expenses, and incorrect family members. In doing so, Austin fraudulently reduced their customers’ taxable income and tax liability, resulting in higher refunds for the customer and higher revenue from the Austin return prep fee. The investigation found that Austin allegedly helped prepare at least 42 fraudulent tax returns and an estimated tax loss of well over $ 697,000 to the federal government.
In addition to the fake and fraudulent tax filing program, the lawsuit alleges that Austin has been running a “tax school” through ETS since 2016 and that students are charged a fee of at least $ 200 for attending the tax school. According to the complaint, the aim of the tax school was to hire the participants as creators for ETS and to prepare tax returns for both ETS customers and the participants’ own customers. During tax school, Austin reportedly instructed aspiring tax advisors to fraudulently manipulate tax returns in order to obtain the maximum tax refund and therefore the maximum tax preparation fee, for example by listing fictitious ancillary businesses in Appendix C and fake business expenses in Appendix A. The complaint describes how Austin taught her students how to create a fictional dog grooming company for a client, how to create a fictitious income statement for the fake company, and how she instructed the client to print out some photos of dogs to show the idea support their fictional business.
Austin is charged with helping create false and fraudulent federal income tax returns in violation of 26 USC Section 7206 (2).
The charges in the lawsuit are merely allegations and the accused is presumed innocent unless proven guilty in a court of law.
If convicted, Austin faces a maximum sentence of three years in prison and a fine of $ 100,000; However, any penalty following a conviction would be imposed by the court in accordance with the U.S. Sentencing Guidelines and federal law imposing a penalty, 18 USC § 3553.
Austin made her first appearance in federal court this morning before Judge Kandis A. Westmore. Austin remains out of custody and her next scheduled appearance is on February 24, 2022 at 10 a.m. for a status conference before Magistrate Westmore.
U.S. Assistant Attorney Abraham Fine is pursuing the case with the assistance of Kay Konopaske and Helen Yee. The indictment is the result of an investigation by the Internal Revenue Service, Criminal Investigation.