NEW JERSEY TAX PREPARER CHARGED IN COVID-19 EMPLOYMENT TAX CREDIT SCHEME:
A Teaneck tax preparer illegally collected $1.43 million for himself and $40 million for clients from the IRS by purposefully exploiting COVID-related credits that neither he nor they were entitled to, a federal indictment alleges. Leon Haynes has been charged with filing more than 1,600 false tax returns for himself and his clients that claimed COVID-19-related employment tax credits, said U.S. Attorney Phillip R. Sellinger on Wednesday. The IRS paid him over $40 million based on false claims.
“The defendant’s alleged abuse of a program designed for those in need is appalling. Today’s indictment sends a clear message that we are committed to protecting the integrity of our tax system and relief programs,” said Jenifer L. Piovesan, Acting Special Agent in Charge of IRS – Criminal Investigation, Newark Field Office.
As a tax preparer, Haynes he allegedly used “employee retention credit” and “paid sick and family leave credit,” which were programs that were intended to help out small businesses during the pandemic, to submit false tax returns to the IRS, according to the press release sent by the U.S. Attorney's Office.
Between November 2020 to May 2023, he is accused of telling his clients they were eligible for COVID-relief money simply because they had a business. He then allegedly submitted forms to the IRS on behalf of his client’s businesses that overstated the number of employees and the amount of wages paid to fraudulently claim these COVID-related tax credits, the U.S. Attorney claims.
He often did not consult his clients when making these claims, authorities said. He also allegedly submitted similarly false forms for four of his own companies.
Haynes allegedly collected a percentage of the tax refunds the clients received from the IRS, in cash, as a fee. The Teaneck man is also accused of not reporting his share of the fees he collected for the fraudulently obtained tax refunds as income.
The charges against Haynes are: 55 counts of aiding and assisting in the preparation of false tax returns, five counts of mail fraud, one count of aggravated identity theft, and two counts of tax evasion.
