Home Dog grooming East Bay tax preparer set up fake family members and dog grooming business to defraud IRS, prosecutors say

East Bay tax preparer set up fake family members and dog grooming business to defraud IRS, prosecutors say

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An East Bay tax preparer has been accused of defrauding the government of at least $697,000 by submitting false tax documents – like photos of dogs to illustrate the non-existent pet grooming business of a client — and creating a “tax school” to teach his techniques to others.

Traci Austin of Brentwood, owner of Emeryville Tax Services, is accused of assisting in the preparation of fraudulent tax returns, according to unsealed federal prosecution documents Wednesday.

In a sworn affidavit accompanying the charges, Internal Revenue Service Agent Christine Stegner said Austin, 44, prepared false and inflated statements of his clients’ expenses and fictitious dependent claims to the IRS from at least 2016 to 2019, reducing their taxable income and increasing the fees she received from their refunds.

The IRS contacted 20 of Austin’s customers and found that many were unaware of the forgeries, Stegner said. She cited a case in which the tax return claimed $16,000 in deductions for a dependent niece’s business losses and expenses, but the client told the IRS that the business did not lose money. money and that there was no dependent niece.

In another case, Stegner said, a client in Austin said the IRS required proof of a listed pet grooming service as a source of business expenses. The client quoted Austin saying she should “print pictures of some dogs and I made a profit and a loss for her,” which contained fabricated figures, the agent said.

Austin also hosted a tax school, starting in 2016, for partners and other tax preparers, charging them up to $200 each and telling them they could make up to $90,000 in one tax season in learning his methods, Stegner said. She said Austin taught her students how to prepare forms listing unearned income credits and business losses, and advised them to keep clients in the dark by not providing them with copies of their tax returns. income.

During a November 2019 session, the agent said, Austin explained to attendees how she allowed two spouses to claim “head of household” deductions by claiming they had two homes on their property.

“Always trying to get a bigger refund for my clients,” Austin reportedly said, the agent said. “That’s what I do. Always find flaws.

An Austin attorney was not immediately available for comment.

Bob Egelko is a writer for the San Francisco Chronicle. Email: begelko@sfchronicle.comTwitter: @BobEgelko