Date: February 3, 2020
FRESNO, Calif. — Chris Donell Smith of Stockton pleaded guilty today to aiding and assisting in the preparation of false tax returns.
According to court documents, Smith owned and operated New Covenant Tax & Accounting, a tax preparation business in Modesto. Between 2012 and 2015, Smith prepared income tax returns that reported false items and dollar amounts for a number of his clients without their knowledge or consent. He falsified charitable contributions, unreimbursed employee expenses, and capital losses and wage income on some of his clients' tax returns. For some of these clients, he prepared a correct tax return which he gave the client, but then electronically filed a fraudulent return claiming a higher refund. He directed that the payment of the refund be split, with the amount the client expected going into the client's own bank account and the additional higher amount going into an account controlled by Smith. According to the plea agreement, Smith defrauded the IRS of approximately $63,000.
This case is the product of an investigation by the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Melanie L. Alsworth is prosecuting the case.
Smith is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on May 11. Smith faces a maximum statutory penalty of three years in prison and a $100,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.