Detroit man pleads guilty in $7 million tax scheme involving 200-plus false returns
FILE-In this photo illustration, a 1040 Individual Income Tax Return document is seen on a desk on April 15, 2024 in North Haledon, New Jersey. (Photo illustration by Michael Bocchieri/Getty Images)
FOX 2 - A Detroit man faces up to five years in federal prison for a tax fraud scheme that claimed over $7 million in refunds and caused the government a loss of about $6.2 million.
Big picture view:
Rodney Underwood pleaded guilty to filing a false claim on Tuesday, in trying to defraud the IRS. He is scheduled to be sentenced on Jan. 6.
Underwood prepared and filed more than 200 nearly identical false tax returns on behalf of clients from various locations in Detroit, according to court evidence.
‘Ghost prepared returns’
Dig deeper:
Prosecutors said Underwood "ghost prepared" these returns, meaning he left the paid preparer section blank so the returns appeared to be self-prepared.
Underwood reported false dividend income amounts and false withholding amounts, to generate refunds that the clients were not entitled to receive on each of the tax returns.
Underwood did not report fees he received from the scheme as income on his own individual tax returns.
"Filing false returns isn’t a shortcut — it’s pure theft," said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. "Fraudulent refunds steal millions from Americans who play by the rules, and we will pursue those who willfully cheat the tax system without fear or favor."
The Source: Information for this report is from the Department of Justice.