A self-employed income tax preparer was sentenced Monday to 37 months in federal prison after reportedly defrauding the Internal Revenue Service of more than $7 million, authorities said.
He was also ordered to pay a $50,000 fine.
The man, identified as Peter Chavez, 44, reportedly supervised the preparation of thousands of federal income tax returns electronically between 1999 and 2002 while operating a business called Tax Care 4 Less in Burbank, according to IRS spokeswoman Linda Lowery.
In the tax returns, he claimed fraudulent itemized deductions — including false mortgage interest expenses, inflated state, local and personal property tax deductions, inflated deductions for charitable contributions and false educational credits — which resulted tax refunds that were higher than they should have been, Lowery said.
The fraudulent returns resulted in a tax loss to the government of nearly $7.4 million. Some of his clients faced IRS tax audits and had to pay back tax refunds they thought they had legitimately received, officials said.
In May, Chavez pleaded guilty to two counts of aiding and assisting in the preparation of fraudulent tax returns, court records show.
The counts relate to federal income tax returns filed on behalf of two clients in 2000 and 2001 which included false deductions and credits, and reduced the taxpayers’ liability by $1,890 and $1,703, respectively.
Chavez has not been working regularly since 2003, Lowery said. Authorities said he moved to Mexico for some time and didn’t work because he feared he would be found and prosecuted.
In March, Chavez was arrested in Hemet and has remained in federal custody ever since.