Filing fraudulent tax return results in prison for tax preparer

HOUSTON – A local tax preparer has been sentenced to federal prison for willfully preparing a fraudulent 2018 joint income tax return, announced U.S. Attorney Alamdar S. Hamdani.

Lynettia Profit pleaded guilty Oct. 6, 2023.

U.S. District Judge Lee H Rosenthal has now ordered Profit to serve 12 months and one day in federal prison to be immediately followed by one year of supervised release. At the hearing, the court heard how Profit and her business executed a long-running scheme to claim false credits on her clients’ behalf, and sought to evade IRS scrutiny. The court also ordered Profit to pay $336,847 in restitution.

Profit operated JNL Tax Services in Houston.

Profit admitted that between 2016 and 2019, she filed fraudulent tax returns for taxpayers. In those fraudulent returns, Profit knowingly reported false education credits and expenses on Schedule C forms to generate larger income tax refunds for her clients.

In 2019, she prepared an income tax return that contained two false $2,500 education credits as well as $70,743 in false expenses that were listed on Schedule C. As a result, the government suffered a tax loss of approximately $22,101. Profit also prepared a false return containing education credits and Schedule C expenses for an undercover agent in February 2020.

The fraudulent tax returns resulted in a loss of at least $336,847 to the United States. 

Profit was permitted to remain on bond and will voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future. 

IRS Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Brad Gray and Andrew Swartz prosecuted the case.