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June 19, 2018

Former IRS Employee Sentenced to Prison for Filing Fraudulent Tax Returns

On April 16, 2018, in the Western District of Missouri, former Internal Revenue Service (IRS) employee Carla Mitchell was sentenced for filing false tax returns. Mitchell was initially charged with this offense, plus aggravated identity theft, in January 2017, in a 15-count indictment. In September 2017, she pled guilty to filing false tax returns.

At all times relevant, Mitchell was a contact representative at the IRS Service Center in Kansas City, Missouri. Mitchell was employed by the IRS from 2006 until June 2015, when she resigned. From at least February 2012 and continuing to about February 2014, Mitchell intentionally devised a scheme for the purpose of obtaining funds for herself and others by preparing false tax returns, in which she used false or stolen information to pay her own personal expenses and the expenses of family members.

Specifically, Mitchell prepared false tax returns for Tax Years 2011, 2012, and 2013 for approximately 13 of her friends and family members, as well as for herself. As part of her scheme, Mitchell included false entries to lower the individual tax liability or increase refunds of her friends, family members, and herself. These false entries included false wages and occupations, fraudulent Federal income tax withholdings, false Schedule C entries, fraudulent dependents, and false education expenses and credits.

Mitchell prepared the false returns from her residence, her boyfriend's residence, and from the IRS Service Center, Kansas City, Missouri. She charged approximately $150 each for the preparation of some of the returns, but did not sign the returns as a "paid preparer" and did not provide their copies of the completed returns to friends and family members. Mitchell directed refunds from seven of the false returns be deposited on a prepaid debit card mailed to her at her home address. Mitchell was linked to 27 fraudulent returns.

Mitchell was sentenced to 12 months and one day in prison followed by one year of supervised release. She was further ordered to pay $137,483.37 in restitution to the IRS and is prohibited from employment as a tax preparer or involvement in tax preparation for others in any capacity.

    Source:  The facts in this case narrative come from the following publicly available documents: W.D. Mo. Indict. filed Jan. 13, 2017; W.D. Mo. Plea Agr. filed Sep. 19, 2017; and W.D. Mo. Judgment filed Apr. 16, 2018.