On November 29, 2022, in the District of Minnesota, Sue Yang pleaded guilty to filing a false Federal income tax return and corruptly impeding and obstructing the administration of Internal Revenue laws.
According to the court documents, since 2003, Yang controlled and operated a tax preparation business in or near Minneapolis, Minnesota that participated in the Internal Revenue Service (IRS) e-file program. The IRS e-file program is a specialized program the IRS offers to qualified tax preparers who are authorized by the IRS to electronically transmit tax returns on behalf of tax filers. Tax preparers are required to apply for authorization and if approved the IRS issues the tax preparer a unique Electronic Filing Identification Number (EFIN). The IRS could deny a tax preparer from participating in the e-file program for failing to file accurate tax returns, failing to pay any tax liability, or otherwise engaging in disreputable conduct or unethical practices. In or about 2010, the IRS conducted a periodic suitability review of Yang and determined he failed to file a 2009 personal income tax return and he owed substantial Federal income taxes for years 2005 through 2008.
In or about August 2012, the IRS notified Yang that he was suspended from participation in the e-file program and he was no longer authorized to electronically file tax returns. Nonetheless, from at least 2012 through April 2022 despite suspension, Yang’s operated as an e-filing tax preparer by disguising his unauthorized participation in the e-file program by enlisting others to obtain an EFIN. Yang then misappropriated these individuals’ unique EFINs by filing thousands of tax returns electronically, on behalf of his paying customers, without revealing himself to the IRS.
Then, during 2018 to 2021, Yang received approximately $765,000 in compensation as a tax preparer, but did not report any income related to his tax preparation businesses to the IRS. Yang’s unlawful conduct with filing false Form 1040, U.S. Individual Income Tax Return for years 2018, 2019, and 2021, in addition to his failing to file Form 1040 for year 2020, resulted in a total Federal tax loss of approximately $214,297.
At sentencing, for corruptly impeding and obstructing the administration of Internal Revenue laws, Yang could receive a maximum of three years’ imprisonment, supervised release term of one year, a fine of $5,000, and a mandatory special assessment of $100 per count. Yang could also receive a maximum of three years in prison, supervised release term of one year, a $100,000 fine, mandatory special assessment of $100 per count, and payment of mandatory restitution in an amount to be determined by the court for filing a false Federal income tax return.
Source: The facts in this case narrative come from the following publicly available documents: D. Minn., Plea Agr., filed Nov. 29, 2022; DOJ Press Release published November 29, 2022; and D. Minn., Information, filed Nov. 10, 2022.