IRS Seizes Records in Tax Fraud Probe : Investigation: Mission Hills preparer is suspected of filing false documents for thousands of clients.

Federal agents seized thousands of documents from a Mission Hills tax preparer suspected of filing false deductions, adjustments and credits for clients, the Internal Revenue Service said Wednesday.

Now, the IRS is mailing completed, but unfiled, tax returns back to some clients for possible corrections.

The investigation of Robert C. Jimenez and two employees is expected to be arduous because the three helped file more than 12,900 returns in the past two years, said William Gilligan, branch chief of the IRS Criminal Investigations Division.

Among the thousands of tax returns, many were completed 1993 tax forms that Jimenez, 54, and his workers, Joe Garcia and Enoch Martinez, failed to get in the mail by the April 15 deadline for filing federal tax returns.

As a result, the documents are being photocopied as evidence and the clients, a number of them recent immigrants, are being contacted by IRS agents to determine how much tax information is false.

That will enable authorities to figure out charges to recommend to the U.S. attorney’s office in Los Angeles, Gilligan said.

“Based on the volume of returns prepared by him and his associates, this is a very large practice,” he said.

“In other (tax fraud) cases, people have gone to the tax preparer based on a referral from their friends,” he said. “ ‘John Doe, my tax preparer, can get you a big refund.’ To them, the tax system is complex and they rely on the expertise of tax preparers.”

IRS officials suspect that Jimenez and his employees benefited financially from the alleged scheme by collecting tax preparation fees from a large number of clients. Most tax preparation offices, Gilligan said, only average several hundred returns a year.

For those people whose tax returns were not mailed on time because of Jimenez’s office, IRS officials will ask the agency’s service center in Fresno to adjust the penalties for late filing and allow extra time for clients to redo the returns.

Clients of Jimenez’s office who have already received excessive refunds or failed to pay taxes will probably be forced to make up the difference and pay interest or penalty charges, Gilligan said.

Fraud schemes by tax preparers are a nationwide problem for the IRS, he added. The Jimenez case is the second time this year that IRS agents in Los Angeles have seized records from a tax preparation office suspected of fraudulent practices.

Agents with a federal search warrant seized several file cabinets of potential evidence from the Richard C. Jimenez & Associates office at 11100 Sepulveda Blvd. during business hours April 15--timing that Gilligan called a “fluke.”

Jimenez has not filed a tax return for himself in 15 years, despite the fact that he has been a tax preparer for at least 20 years, according to the affidavit.

Jimenez could not be reached for comment Wednesday and his office in the Windsor Center mini-mall was closed. A sign posted on the door said the office would reopen today.

Jimenez has been in trouble with the IRS before. The IRS conducted a criminal investigation against Jimenez for failing to file his 1972-75 personal tax returns. He was sentenced to four years probation and was required to file his taxes in a timely manner. In 1979, he pleaded guilty to two counts of preparing false tax returns for clients and one count of failing to file his own tax return.

The investigation of Jimenez’s office began in 1993, when undercover agents posed as clients needing tax returns done, according to a 17-page search warrant affidavit.

In one instance, an agent who brought in a W-2 form showing an annual income of $18,559 and a tax withholding of $1,891 was told he would receive a $357 refund. If calculated correctly, the agent should have paid an additional $10 in taxes, or $1,901.

The agent received a completed tax return that listed expenses of $978 for church contributions and $2,701 for miscellaneous repayments--items the agent knew nothing about.

IRS officials contend that Jimenez listed someone else’s Social Security number, rather than his own, at the bottom of tax returns he prepared as a way of avoiding IRS scrutiny and hiding the unusually large number of clients he served.

Gilligan said he has not yet determined the amount of tax dollars lost in the alleged scheme. But Jimenez’s office helped clients get a total of more than $7.9 million on 1991 tax returns and about $7.9 million on 1992 returns.

It will probably be awhile before Jimenez’s clients see their tax refunds, Gilligan said, because the IRS is inundated with last-minute filings.

IRS officials are asking clients who need their tax records back and anyone with more information about the investigation to contact the agency’s Glendale office at (818) 244-2511.