Fraudulent Tax Return Preparer Sentenced to Prison

WASHINGTON - Tax preparer Lawrence Sperling, was sentenced to 33 months in prison today by Judge Deborah Chasanow in Greenbelt, Md., for preparing false tax returns for clients, the Justice Department and Internal Revenue Service (IRS) announced.

In April 2009, Sperling pleaded guilty to one count of aiding and assisting in the preparation and presentation of a false tax return. According to the plea agreement and court records, Sperling is a former attorney (now disbarred), who owned and operated a tax preparation business in Silver Spring, Md., that operated under several names, including American Tax Service, American Tax Institute, JAMAR LLC and American Tax Professional Associates Inc.

According to court records, Sperling prepared individual income tax returns for his clients, along with related schedules and attachments. From approximately January 2002 through at least May 2003, Sperling prepared tax returns for his clients that contained fraudulent items that he knew were greater than that to which the taxpayer was entitled. These false items included medial expenses, charitable contributions, miscellaneous employment-related expenses, and child care credits. Sperling conceded that his practice of preparing false tax returns resulted in a tax loss to the United States of $804,335.

According to the plea agreement, Sperling also impeded the IRS with respect to his individual taxes. Beginning in 1988, Sperling failed to file tax returns for eleven years. In 2001, the IRS penalized Sperling and fined him $10,000 for "willful or reckless understatement of taxpayer’s tax liability" with respect to his tax preparation business. The IRS sent him more than two dozen notices of taxes and penalties due and other warning letters. Beginning in at least 1998, Sperling used a nominee to file the tax returns for his clients and to collect his preparation fees. The nominee held these funds and made disbursements to Sperling or others at Sperling’s request. Sperling never reported or paid taxes on these funds, although he used a portion of them to pay business expenses. As a result, Sperling caused a tax loss of $130,847. The total tax loss related to all of his conduct is $935,183.

Acting Deputy Assistant Attorney General Ronald A. Cimino thanked the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jerrod Patterson, Shawn Noud, and Tino Lisella, who prosecuted the case.