A Maryland woman was sentenced today to 12 months and one day in prison for preparing false tax returns for clients.
According to court documents and statements made in court, Zewdi Tsegay, of Burtonsville, Maryland, operated a tax preparation business initially called Taxes R Us LLC. From 2017 through 2023, Tsegay prepared and filed with the IRS false tax returns on behalf of clients. These tax returns included false business losses that resulted in either the clients receiving tax refunds that they were not entitled to receive or the clients’ tax liabilities being decreased. After Tsegay learned she was under investigation, she changed the name of the business to Taxes 4 You, LLC.
In March 2020, the IRS conducted an undercover operation at Tsegay’s return preparation business. Tsegay initially prepared the undercover agent’s tax return correctly, which reflected that the undercover agent owed taxes. Tsegay then added a fictitious business loss to the undercover agent’s tax return, which resulted in the return improperly claiming a refund. Following a search warrant at her tax preparation business, Tsegay continued to prepare and file false returns on behalf of clients under the name of another individual. Further, from 2021 to 2023, Tsegay was required to file tax returns for herself, but she willfully failed to do so by the statutory deadline.
In total, Tsegay caused a tax loss to the United States between $250,000 and $550,000.
Tsegay pleaded guilty to one count of aiding and assisting in the preparation and presentation of a false tax return. In addition to the term of imprisonment, U.S. District Judge Theodore D. Chuang ordered Tsegay to serve one year of supervised release and to pay $178,480 in restitution to the United States.
Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division made the announcement.
IRS Criminal Investigation investigated the case.
Trial Attorneys Catriona Coppler and Richard Kelley of the Criminal Division’s Tax Section prosecuted the case.
On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (“Fraud Division”). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.
