PALM BEACH COUNTY TAX RETURN PREPARER CHARGED WITH TAX VIOLATIONS INVOLVING FIRST-TIME HOME BUYER TAX CREDIT
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CI), announced the unsealing of an eight count Indictment returned by a West Palm Beach federal grand jury against Gregory J. Salgado, Jr., 39, of Royal Palm Beach, FL on charges that he filed false income tax returns for himself and his clients in which he fraudulently claimed the First-Time Home Buyer Credit (FTHBC) and other tax credits and deductions.
As alleged in the Indictment, the Housing and Economic Recovery Act of 2008 established a refundable tax credit for first-time homebuyers equal to 10 percent of the purchase price, up to $7,500, for home purchases completed in 2008. The taxpayer was to repay the credit interest free over 15 years. The FTHBC was increased to $8,000 for homes purchased in 2009 if the taxpayer retained the residence for more than 36 months, and no repayment of the credit was required for 2009 purchases.
Count 1 of the Indictment alleges that Salgado filed a false personal income tax return for the tax year 2008 in which he falsely claimed the FTHBC of $7,500 even though he knew that he was not entitled to the credit.
The Indictment alleges that Salgado operated a tax return preparation business in Palm Beach County in 2009 where he prepared tax returns and electronically filed them for his clients, usually for a fee of $175 per return. Counts 2 through 8 of the Indictment charge Salgado with filing false tax returns for his clients for the tax year 2008 by entering fabricated information to support a false claim that the taxpayer was entitled to claim the FTHBC and other credits and deductions to which they were not entitled and without any basis in fact or supporting documentation from the taxpayer. Other credits and deductions falsely claimed by Salgado on his clients' returns included the earned income tax credit, business expenses, home mortgage interest, gifts to charity, unreimbursed employee expenses and medical and dental expenses. If convicted, Salgado faces a maximum statutory term of imprisonment of up to three years and a fine of up to $250,000 for each count of filing false individual tax returns.
Defendant Salgado made his initial appearance in court today before U.S. Magistrate Judge James M. Hopkins and arraignment was set for Friday, January 27, 2012. Bond was set at $50,000 corporate surety bond. At the bond hearing, the government represented that the total tax loss to the U. S. Government resulting from this fraud was between $400,000 and $1 million.
Mr. Ferrer commended the investigative efforts of the Internal Revenue Service, Criminal Investigation Division. This case is being prosecuted by Assistant U.S. Attorney Lauren Jorgensen in the West Palm Beach office.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
Attachments:
Indictment (PDF)
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
