CALIFORNIA WOMAN BARRED FROM PREPARING FEDERAL TAX RETURNS FOR OTHERS

Allegedly Inflated Customers’ Deductions; Loss to Treasury Exceeding $300,000

WASHINGTON – A federal court has permanently barred a Newman, Calif., woman from preparing federal income tax returns for others, the Justice Department announced today. According to the government’s complaint, Bonnie Arnel, who conducted business as Arnel Accounting in southern Illinois before moving to California, repeatedly prepared federal income tax returns claiming false deductions. Arnel agreed to the civil injunction order.

The government complaint alleged that Arnel engaged in a pattern of claiming false and inflated deductions for her customers, frequently by amending their previously filed returns, and that she promoted this scheme with full knowledge that it was fraudulent. According to the complaint, Arnel told customers that she could “find the deductions the IRS [did] not want [her customers] to know about.”

Arnel also allegedly promised customers that, as part of her tax preparation services, she would represent them at IRS audits, when she had no intention to do so and in fact never did. According to the complaint, between 2001 and 2003, the IRS determined that 82 returns prepared by Arnel resulted in a loss to the government of $303,014.

Arnel pleaded guilty in 2007 to a 43-count indictment charging her with preparing and filing false income tax returns. She also pleaded guilty to similar criminal conduct in 1987 and was sentenced to 16 months’ incarceration and five years of probation.

“The IRS and Justice Department are committed to putting fraudulent return preparers out of business and in jail,” said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. “Since 2001, the Justice Department’s Tax Division has obtained injunctions against more than 355 tax-return preparers and tax-fraud promoters.”

Hochman thanked Tax Division trial attorney Brian Corcoran who handled the case.

Information about these cases is available on the Justice Department Web site, as is information about the Justice Department’s Tax Division.