U.S. District Judge Rodney W. Sippel has sentenced Shasherese M. Reed, a tax preparer from St. Louis, to five years of probation for preparing fraudulent tax returns. Reed was also ordered to pay $230,000 in restitution.
Reed prepared at least 41 false tax returns for 13 taxpayers, resulting in a loss of at least $312,192 to the IRS. According to a sentencing memorandum by Assistant U.S. Attorney Jonathan Clow, Reed “made up businesses out of thin air and claimed tens of thousands of dollars in false business expenses, false medical and dental expenses, mortgage interest, state and local taxes, and deductible employee expenses,” which inflated her clients’ refunds by thousands per return.
To circumvent the IRS revocation of her Preparer Tax Identification Number (PTIN) in 2015 due to submitting false returns, Reed falsely listed her daughter as the paid preparer on these returns and filed them under her daughter’s business name, Majac Money.
The sentencing memo notes that instead of being deterred by the previous investigation by the IRS, Reed “doubled down on her illegal acts.” During the investigation phase, she even prepared a fraudulent return for an undercover IRS Criminal Investigation agent without confirming if the agent had any business activities.
Reed charged hundreds of dollars per client for preparing these returns and earned approximately $378,026 in fees from 2017 to 2021. She pleaded guilty in February to two counts of aiding and assisting in preparing false and fraudulent tax returns.
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Jonathan Clow.
