Haydee Guerra Neff, a longtime resident of Casa Grande, Arizona, pleaded guilty yesterday to two counts of filing false, fictitious and fraudulent claims on Tuesday. Guerra Neff prepared fraudulent tax returns for her clients by including false claims that were generally added to the returns without the clients’ knowledge.
The Casa Grande mom, age 36, started an income tax preparation business in 2008 which she operated from her home.
Neff, who graduated in 1996 from Casa Grande Union HS, through her business, prepared and filed income tax returns for her clients. Guerra Neff usually met with her clients in her home office by appointment. Guerra Neff’s clients generally paid between $40 and $80 for the preparation of their returns. The scheme, a common one, began in the spring of 2011.
Guerra Neff pled guilty to knowingly and willfully preparing and electronically filing false income tax returns with the Internal Revenue Service for tax years 2010 and 2011. These false returns resulted in inflated refunds, portions of which Guerra Neff diverted into five or more bank accounts that she controlled.
Guerra Neff accomplished this by preparing correct or substantially correct returns using the information provided by each client and later changing the return without the client’s knowledge or consent. The client was then provided with the correct or substantially correct tax return, but Guerra Neff would file with the IRS the false tax returns, which contained false expenses and the resulting requests for inflated refunds. Guerra Neff altered clients’ returns by adding college education expenses using Form 8863, home mortgage interest expense using Schedule A, and residential energy credits using Form 5695, without her clients’ knowledge or consent, resulting in inflated refunds.
Guerra Neff then obtained and split a number of the refunds between two or more bank accounts using Form 8888 Allocation of Refund. This form allows a taxpayer to designate that a tax refund be split and deposited into more than one bank account. The clients received the portion of the refund equal to the amounts shown on the returns copies provided to them by Guerra Neff. The remaining portion of the clients’ refunds were directed to and deposited into accounts controlled by or associated with Guerra Neff.
On some of the altered returns, Haydee Guerra Neff had the full refunds deposited into her own accounts and paid the clients their refunds by cash or check. Guerra Neff submitted at least 26 such false tax returns to the IRS, which resulted in approximately $137,009 in additional refunds, which were then diverted all or in part to bank accounts under her control.