Tax Preparer Sentenced to 24 Months in Prison for Filing False Tax Returns

Jeffrey Harmon of Lexington, S.C., has been sentenced to 24 months in prison for preparing and filing false individual income tax returns for himself and his clients. Harmon, the owner and operator of TFL Worldwide, a tax preparation business in South Carolina, consistently deducted non-deductible personal expenses on tax returns to reduce tax liability. These expenses included personal rent and mortgage payments, vacation travel, fitness and golf equipment, and country and hunt club membership fees.

Harmon used a coaching service to provide what the authorities described as “bogus tax advice” to unsuspecting clients. Despite being a former CPA, Harmon’s license had lapsed. His company, TFL Worldwide, Inc., claimed to be a reputable consultant in proactive tax planning, business coaching, and seminar training. Harmon charged clients between $350 and $1,000 for tax return preparation and up to $7,000 for QuickBooks and “business coaching.”

On his personal tax returns, Harmon consistently underreported his business income by falsely deducting personal expenses as business deductions. For example, he claimed the rent for his personal residence as a business expense, amounting to approximately $30,000 per year. Harmon justified this deduction by misapplying the Augusta Rule, which allows for the exclusion of rental income if the personal residence is rented for fewer than 15 days.

Harmon also mischaracterized personal expenses as business expenses on client returns, including rental expenses for personal residences and excessive meal and travel deductions. The U.S. suffered a total tax loss of $320,005 due to Harmon’s false tax returns.

On April 21, 2023, Harmon pleaded guilty to one count of filing a false tax return and one count of aiding and assisting in the filing of a false tax return. In addition to his prison sentence, he was ordered to serve one year of supervised release and pay $320,005 in restitution to the United States. The case was investigated by the IRS-CI, the criminal investigative arm of the IRS responsible for financial crime investigations.

 

CrimeDoor
Author: CrimeDoor

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