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Portland Tax Return Preparer Sentenced to Prison for Preparing False Returns
tax attorney newport beach
Issues Remain for Resolution by Courts as Litigation Over IRS’s Supervisory Written Approval of Penalties Requirements Continues

Palm Beach County Tax Return Preparer Sentenced to Prison for Filing False Returns and Theft of Government Funds

tax attorney newport beach
tax attorney newport beach

The United States Department of Justice has issued a press release concerning the sentencing of a West Palm Beach tax return preparer. Paul Senat was sentenced by the Southern District of Florida to 90 months in prison for aiding and assisting in the preparation of false tax returns and theft of government funds.

Per the press release:

According to the evidence presented at trial, from at least 2012 to 2016, Paul Senat was the owner and operator of multiple tax return preparation businesses in Palm Beach and surrounding areas. Through the businesses, Senat falsified his clients’ returns by reporting fictitious business losses and education credits in order to fraudulently inflate their refunds.  Senat also stole a federal tax refund check worth nearly $10,000.

A federal jury in Fort Lauderdale, Florida convicted Senat on Nov. 6, 2019.  Following the jury verdict, Senat was taken into custody.

At sentencing, U.S. District Judge Rodolfo A. Ruiz found that Senat caused a tax loss of more than $3.5 million to the United States.

In addition to the term of imprisonment, U.S. District Judge Ruiz ordered Senat to serve three years of supervised release and to pay $9,779 in restitution to the United States.

According to the Tax Division’s Criminal Tax Manual, aiding and assisting in the preparation of false tax returns is charged under 26 U.S.C. §7206(2). The elements for a conviction under this statute are:

  1. Defendant aided or assisted in, procured, counseled, or advised the preparation or presentation of a document in connection with a matter arising under the internal revenue laws;
  2. The document was false as to a material matter;
  3. The act of the defendant was willful

Theft of government funds is charged under Section 641 of Title 18 of the United States Code, 18 U.S.C. § 641. This section is titled “Embezzlement of Government Property” and the elements for a charge are listed below:

  1. a trust or fiduciary relationship between the defendant and the property owner;
  2. the property taken falls within the statute; i.e., it must be government property (see this Manual at 1643 for a discussion of the types of property which fall within this section);
  3. the property came into the possession or care of the defendant by virtue of his employment;
  4. the property belonged to another, in this case the United States;
  5. the defendant’s dealings with the property constituted a fraudulent conversion or appropriation of it to his own use; and
  6. the defendant acted with the intent to deprive the owner of the use of this property.

The “Tax Table” provides that tax losses of more $3.5 million dollars, before considering other relevant factors or characteristics, fall under Offense Level 24 because it is more than $3.5 million and less than $9.5 million. According to the “Sentencing Table”, an Offense Level of 24 typically carries with it a sentence of between 51 and 63 months.  

All persons who are merely charged with crimes are presumed innocent until proven guilty. Furthermore, sentences can vary depending on several factors which vary from person to person. This blog post does not implicitly or explicitly suggest there is basis to the prosecuting agency’s allegations or take any position on the strengths or weaknesses of the government’s positions.

Posted on 02/26/2020 by Benjamin Tu

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