/Tax preparer from nation’s poorest county sentenced to five years for $35 million in tax fraud

Tax preparer from nation’s poorest county sentenced to five years for $35 million in tax fraud

According to a U.S. Department of Justice release, Chism used false information to increase her clients’ tax refunds under the business names Mo’ Money USA, MoneyCo USA, and Lady T Taxes. Chism created 550 false income tax returns between 2002 and 2015. This was in an effort to collect over $3.5million in fraudulent tax returns for her Durant community. It is the county with the lowest population in the country. Chism did this by reporting false wages and self-employment income, expenses and education credits. U.S. attorney Mike Hurst stated in the release that “the defendant lied and cheated our tax system and stole money that should’ve gone to our families and communities, and our children’s futures.” According to ProPublica data, Holmes County, which has nearly half the population living in poverty, is also one of the most heavily audited areas in the country. The Internal Revenue Service audits less than 8 out of every 1,000 tax returns in the United States, but it audits more that 11 out of 1000 in Holmes County. The most audited county is in Neighboring Humphreys County. Mississippi Today examined the reasons why the Mississippi Delta has one of the highest income tax audit rates in the country. It found a complex set of problems for these taxpayers, including the lack of documentation about income and residency. People who claim the Earned Income Tax Credit (a federal assistance program that provides extra funds to poor families in addition to tax refunds) are twice as likely be audited as taxpayers with a salary of $400,000. Low-wage workers often rely on lump-sum tax returns to cover their needs. This increases the tension around tax season. Latoya Skinner, a Belzoni tax preparer, told Mississippi Today that some tax preparers don’t know much about IRS processes and tax law. However, others will take advantage of clients. Hurst advised Mississippians this tax season to stay away from tax preparers that promise higher returns than their competitors or who base their fees on the size of their return. Chism pleaded guilty last August to the charges. U.S. District Judge Henry T. Wingate sentenced Chism to five years imprisonment and ordered him to serve three years of supervision. He also ordered Chism pay $135,134 as restitution to IRS. It is a wonderful day for all taxpaying citizens when someone involved in their criminal scheme has been held accountable. The IRS criminal investigator Thomas J. Holloman III stated in the release that others who attempted to steal similar tax forms from the US Treasury are now aware that special agents from IRS – Criminal Investigation will continue their aggressive pursuit of individuals who try to defraud America’s tax system. Jameka Coffey, another Starkville tax preparer, pleaded guilty to filing fraudulent tax forms last August. Kushauntia, a Brandon tax preparer, was sentenced in 2016 to 20 years imprisonment for her own tax return scheme.