The owner of Emeryville Tax Services, a tax return preparation business on San Pablo Avenue, has been charged with aiding and assisting in the preparation of fraudulent tax returns. The prosecution is the result of an investigation by the IRS Criminal Investigation agency.
Traci Austin, 44, of Brentwood, Calif., is alleged to have prepared materially false and fraudulent tax returns for her clients by including false and/or inflated expenses, income and dependents. Austin opened her first Emeryville business in 2013 and gradually expanded to locations in Richmond and Pittsburg.
The investigation has revealed that Austin allegedly assisted in the preparation of at least 42 fraudulent tax returns and an estimated tax loss of well over $697,000 to the federal government.
According to the announcement by the U.S. Justice Department of Justice, the complaint also alleges that since 2016, Austin has hosted a “Tax School,” charging at least $200 per student. According to the complaint, the goal of the tax school was to hire the attendees as preparers for Emeryville Tax Services and prepare tax returns for the company’s clients as well as the attendees’ own clients.
Austin allegedly instructed prospective tax preparers how to fraudulently manipulate tax returns to generate the maximum tax refund, and thus the maximum tax preparation fee by listing fictitious side businesses under Schedule C and fake business expenses on Schedule A. Tthe complaint describes Austin teaching students about she created a fictitious dog grooming business for a client, created a fictitious profit and loss statement for the fake business, and how she instructed the client to print out some photos of dogs to support the idea of her fictitious business.
Austin made her initial federal court appearance Thursday, December 2 before United States Magistrate Judge Kandis A. Westmore. Austin remains out of custody and her next scheduled appearance is on February 24, 2022.
“These allegations are not true and I stand behind them,” Austin noted through email expressing her confidence that she would be vindicated of these charges.
If convicted, Austin faces a maximum penalty of three years in prison and a $100,000 fine.
Assistant U.S. Attorney Abraham Fine is prosecuting the case with the assistance of Kay Konopaske and Helen Yee.
Photos: Emeryville Tax Instagram account.