May 8, 2014 — The Tax Relief and Health Care Act of 2006 put in place an IRS Whistleblower Office so tipsters with information about tax fraud could notify the IRS and be rewarded for their courage in doing so. The Act provides tipsters with between 15 to 30 percent of the amount recouped by the IRS. The rules are different for tips concerning businesses and those related to private individuals. An experienced qui tam lawyer with Waters & Kraus can explain the entire whistleblower process.
Husband and Wife Filed 3 Years’ Worth of Phony Tax Returns, Received $591,000 Refund to Which They Were Unentitled
Tennessee residents James and Beverly Beavers have both been sentenced to a 36-month prison sentence with three additional years of supervised release for filing false tax returns with the IRS. In addition, the husband and wife were each ordered to pay $591,123 in restitution. The couple was convicted by a jury in March 2013 for filing false returns and conspiracy to defraud the U.S. government.
The husband, James Beavers, was an engineering consultant with a Ph.D. in civil engineering. His wife, Beverly Beavers, owned a Knoxville business specializing in jewelry and formalwear.
In June 2009, the couple engaged PMDD Services LLC to prepare a phony 2008 tax return, using used fictitious Forms 1099-OID and reflecting that their considerable debts were actually income from which federal income tax had been withheld. Relying on the falsely stated income and withholding, the Beavers claimed and received a tax refund in excess of $591,000. The couple used the money to pay off their mortgage and then transferred title to the property to sham trusts, as a means to prevent the IRS from recovering the fraudulently obtained refund.
After their success with the 2008 tax return, reports DOJ, the Beavers filed phony amended tax returns for 2006 and 2007, again asking for refunds, this time in the respective amounts of $193,056 and $202,625.
In January 2013, the couple’s tax preparer with PMDD Services LLC received a 144-month prison sentence after pleading guilty to related tax crimes.
Blowing the Whistle on Tax Fraud
Before stepping forward to blow the whistle on tax fraud, informants should learn how the process works. The whistleblower lawyers with Waters & Kraus provide government collaborators with the legal counsel they deserve. Contact us by email or call our qui tam attorneys at 855.784.0268 to learn how we can safeguard your interests.