Columbia area tax preparer Cynthia Stukes had a nice thing going — she falsified tax returns to show phony expenses for business losses and other claims so her taxpayer clients could get fat tax refunds they didn’t deserve, according to federal prosecutors.
But the IRS caught up with her.
Stukes, a former IRS employee who prepared tax forms for taxpayers all over the Midlands, has pleaded guilty in federal court to filing false tax returns.
Stukes was able to secure illegal annual refunds for her clients at her business, Blackwell Tax Business Service, ranging from $4,000 to $13,600 from 2011 to 2016, evidence showed. Her business was based in Hopkins, in Lower Richland, according to the indictment in the case.
Federal Judge Joe Anderson, who took Stukes’ guilty plea late last week, will sentence Stukes at a later date. She faces up to a three-year prison term.
According to evidence in the case, the IRS flagged Stukes for investigation when an examination of returns she was sending in showed an unusually high number of business losses, education expenses and other claims for tax credits.
The investigation also showed she had claimed deductions for herself personally for dependents that didn’t live with her, according to evidence.
Most of the phony deductions were claimed on the IRS’s Schedule C tax form, on which taxpayers can list their business deductions and other expenses.
In some cases, Stukes’ customers had told her they paid for replacement of their homes’ HVAC (heating, ventilation and air conditioning) system. She then took that information and filed their taxes with a $13,000 tax credit for a “solar water heater,” even though the HVAC unit is not a solar water heater and not eligible for that credit, according to evidence in the case.
Specifically, Stukes pleaded guilty to falsifying 20 different returns for six different households, getting them refunds totaling some $170,000. In return for her guilty plea, other related charges will be dropped.
To make the case against Stukes, an IRS agent interviewed dozens of her clients. While employed by the IRS, Stukes largely performed secretarial duties, but she used her experience with the agency as a selling point for prospective clients, prosecutors said.
Stukes’ attorney, Overture Walker, could not be reached for comment on Monday or Tuesday.
Assistant U.S. attorneys handling the case were DeWayne Pearson and Alyssa Richardson.
The U.S. Attorney’s Office for South Carolina, headquartered in Columbia, prosecutes various types of tax fraud in the state. Cases include the so-called “sovereign citizens” who make sizable false tax claims.