A woman from Burtonsville, Maryland, is facing serious charges after a federal grand jury indicted her for preparing false tax returns for clients and failing to file her own tax returns.
The indictment, which was unsealed yesterday, sheds light on the alleged activities of Zewdi Tsegay, who ran a tax preparation business under the names Taxes R Us LLC and later Taxes 4 You LLC.
Allegations of False Tax Returns and Refund Claims
From 2018 to 2024, Tsegay allegedly prepared and submitted fraudulent tax returns to the IRS for her clients.
According to the indictment, she is accused of inflating business losses, which resulted in false refunds for her clients—refunds they were not entitled to—or of reducing their tax liabilities inappropriately.
This illegal activity was meant to benefit her clients financially, at the expense of the IRS.
Undercover Operation Exposes the Scheme
In March 2020, the IRS launched an undercover operation at Tsegay’s business.
The investigation revealed troubling behavior: Tsegay initially filed a tax return for an undercover agent that correctly showed the agent owed taxes.
However, she later added a fictitious business loss to the return, ultimately requesting a refund the agent was not entitled to.
This move exposed the depth of the fraudulent activity she was involved in.
Failure to File Her Own Returns
In addition to the false tax returns prepared for her clients, Tsegay is also accused of failing to file her own tax returns between 2021 and 2023.
Despite being legally required to file, she allegedly neglected her own financial responsibilities during this period.
Potential Consequences if Convicted
Tsegay faces severe legal consequences if convicted of the charges.
For each count of filing a false tax return, she could face up to three years in prison.
Furthermore, for each count of failing to file her own tax returns, she faces a maximum penalty of one year in prison.
A federal district court judge will determine her sentence based on the U.S. Sentencing Guidelines and other relevant factors.
Investigation and Prosecution
The case is being investigated by the IRS Criminal Investigation division, with the prosecution led by Trial Attorneys Catriona M. Coppler and Richard Kelley of the Justice Department’s Tax Division.
Acting Deputy Assistant Attorney General Karen E. Kelly made the official announcement regarding the indictment.
Legal Disclaimer
It’s important to note that an indictment is merely an allegation, and Tsegay, like any defendant, is presumed innocent until proven guilty in a court of law beyond a reasonable doubt.
