Local Tax Preparer Busted for Not Paying His Taxes

By Nicholas Phillips Wed., Jan. 4 2012 at 12:30 PM

Although Richard Gray Sr. spends some of the year working at a Chrysler plant in Indiana, he's been running a nice little side business out of his home in North St. Louis: Filing tax returns for friends, family and co-workers using TurboTax. He's even expressed a desire to do tax-prep full-time.

Trouble is, a lot of what he's doing is deceptive and illegal, according to a civil injunction suit filed yesterday in federal court by the U.S. Department of Justice. (It's not exactly a criminal charge, but rather a request that the Court shut down Gray's operation).

Now that an IRS investigation has concluded, the government alleges that:

In 2009, Gray earned between $20 and $100 per return on 134 returns, but didn't report it as income.
He creates sham businesses and fictitious dependent children to increase tax refunds for his clients.
In so doing, he cheated the U.S. Treasury during 2009 alone out of an estimated $500,000.

The case has been assigned to Judge Rodney Sippel.
USA v. Richard Gray Sr.

Tags:

civil injunction suit, IRS, Richard Gray Sr., TurboTax, U.S. Department of Justice

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KITTY

There are many many ways people can cheat on their taxes and never get caught. Whenever the government '"trusts" taxpayers to be honest on their tax returns, unscrupulous people take advantage of the system. Since the IRS only audits a small percentage of tax returns, tax cheaters have the odds with them and most will never be caught. Richard Gray, Sr. milked the system for his own personal gain and reaped a small fortune. The odds are he will face no prison time. Making $500K from cheating on one's taxes for one year is plenty of temptation for more such crooks to do the same. Most will waltz away with the money with no fear of being caught or severely punished. Ray probably can't or won't make restitution. Unless he has substantial assets to attach, the IRS is up the creek in trying to make recovery.

So, a person can say to themselves: I can cheat on my taxes and reap $500 g's. I will likely get no more than three years in prison, and more likely probation if I retain Scott Rosenblum. So, that nets me $166,666.00 per year. Yea, I could to three years for that especially since federal prisons are much nicer and less dangerous thant state prisons. And I may get off scott free if I liberally apply Shaun Hayes Magic Teflon spray. Nothing sticks to it. Not even $30M in judgments. Hmm, something's not right with this scenario. Hayes reaped millions and millions from "robbing" banks with only his signature on a loan document. Yet he hasn't made any restitution and no criminal charges will ever be filed against him. Yet, a poor bastard who holds up the same bank for a measly two grand gets 10 years in prison. Is it any wonder people cheat on their taxes?