IRS Seizes Tax Preparer’s Records in Fraud Probe

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.

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 a taxing one--so to speak--because the three helped file more than 12,900 returns in the last 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 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 in order to determine how much tax information is false.

That will enable authorities to figure out what kind of 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.

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

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.

Agents carrying a federal search warrant seized several file cabinets full of potential evidence from the Richard C. Jimenez & Associates office 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, Gilligan said.

Jimenez could not be reached for comment Tuesday and his office was closed. The investigation of Jimenez’s office began in 1993, when undercover agents posed as clients.