Date: February 25, 2020
KANSAS CITY, Mo. – A Kansas City, Missouri, tax preparer was sentenced in federal court today for a scheme to file false tax returns.
Azareia Derseh was sentenced by U.S. District Judge Howard F. Sachs to 18 months in federal prison without parole. The court also ordered Derseh to pay $108,621 in restitution to the IRS.
On Oct. 24, 2019, Derseh pleaded guilty to aiding and assisting in the preparation of a false tax return. His brother and co-defendant, Ananeia Derseh of Kansas City, Missouri, pleaded guilty to the same offense and awaits sentencing. Co-defendant Quashanda King of Kansas City, Missouri, pleaded guilty to the same offense and has been sentenced to three years of probation.
Azareia Derseh owned and operated a tax preparation business in the Kansas City metropolitan area, under the names Instant Tax Service and Speedy Tax Service, at various locations. Ananiea was the manager in charge of one of the offices and King was the manager in charge of another office.
Azareia and Ananeia Derseh and King each admitted they prepared federal income tax returns for clients containing materially false and fraudulent items. They prepared returns for at least 37 individuals resulting in at least 47 false income tax returns for tax years 2012, 2013, and 2014.
The preparation of false tax returns for individuals was conducted by including false Schedule C information claiming a modest amount of income in order to maximize the Earned Income Credit. This resulted in a higher tax return for the individuals and higher fees paid to the tax preparation business.
Azareia and Ananeia Derseh and King included higher fees to prepare clients' returns than what the clients were originally quoted. Often, a false Schedule C was included with clients' returns to increase clients' refunds. Client refunds were used to pay the high fees, with the fees most often being deducted from clients' refunds before the refund was issued to the client. Most of the clients had between $669 and $1,437 in fees deducted from their refund.
According to court documents, the typical client who had their return prepared at Instant Tax Service was a very low wage earner, typically with under $3,000 inW-2 wages. Further, the clients were unsophisticated in tax or financial matters. When they walked into one of the two offices, they were assigned a preparer, who input their W-2 wages, dependents, and other identifying information into the appropriate field of their electronically filed returns. There was no meaningful review of the completed return, and sometimes, the client did not get a copy of the return.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Assistant U.S. Attorney Paul S. Becker.