Former IRS employee sentenced to federal prison for preparing false tax returns

Date: Jan. 8, 2026

Contact: newsroom@ci.irs.gov

SAN ANTONIO – A former IRS employee was sentenced in a federal court in San Antonio to 24 months in prison and a $150,000 fine for preparing false tax returns.

According to court documents, Hector Cavazos of San Antonio owned and operated a tax return preparation business, where he aided and assisted in the preparation of 61 false tax returns on behalf of 13 taxpayer-clients and one undercover agent for tax years 2016 through 2021. Defying IRS regulations, Cavazos did not sign any of the returns as a paid preparer. Additionally, the 61 tax returns prepared by Cavazos contained false Schedule C losses, unbeknownst to the 13 taxpayer-clients. The 61 violations amounted to a tax loss of $579,682.

Cavazos had been employed by the IRS until 1996, when he was arrested and charged with fraud in the Eastern District of California. He pleaded guilty to conspiracy and collusion with another person to defraud the United States and was sentenced on Nov. 6, 2000, to two months in prison.

On Sept. 4, 2024, Cavazos was indicted on 27 counts of preparing false tax returns. He pleaded guilty to one count on July 1, 2025. In addition to ordering the prison sentence and fine, U.S. District Judge Fred Biery barred Cavazos from preparing, aiding and assisting in the preparation of tax returns.

“Unscrupulous tax return preparers such as Hector Cavazos cause incalculable harm not only to the U.S. Treasury and all U.S. taxpayers, but also their own clients who face the possibility of additional taxes plus interest and penalties,” said U.S. Attorney Justin R. Simmons for the Western District of Texas. “The multi-year prison sentence and fine imposed in this case reflects the seriousness of this offense, and my office will continue to prosecute individuals who violate federal tax laws.”

“Cavazos never signed his name or provided an IRS Preparer Tax Identification Number. He was a ghost preparer. He made his fraud look like his clients prepared the returns,” said Assistant Special Agent in Charge Troy Caldron of IRS Criminal Investigation’s Houston Field Office, which includes San Antonio. “Not only did he betray his clients, Cavazos also betrayed the trust that taxpayers have in the profession of tax preparers. Tax season is approaching, and everyone needs to be diligent in selecting who prepares their taxes.”

IRS-CI investigated the case.

Assistant U.S. Attorney Bill Harris prosecuted the case.

IRS Criminal Investigation (IRS-CI) is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a 90% federal conviction rate. The agency has 19 field offices located across the U.S. and 14 attaché posts abroad.