In a case that highlights the risks of dishonest tax preparation, a man from New Jersey has pleaded guilty to submitting false tax returns on behalf of his clients.

This admission came out during a recent court hearing and sheds light on a scheme that cost the IRS more than half a million dollars.

How the Fraud Worked

According to court documents and statements made during the hearing, Vito A. Pascarella, who lives in Somerset, ran a business where he prepared tax returns for others.

However, Pascarella didn’t play by the rules. He knowingly prepared and caused false tax returns to be filed, with fabricated information designed to deceive the IRS.

Some of the falsified details included reporting incorrect wages for taxpayers and claiming that clients owned businesses they actually had no connection with.

These fake businesses were also said to have earned revenue and had expenses — all of which were completely made up to reduce tax liabilities.

The Financial Impact

This fraudulent activity resulted in a tax loss to the IRS totaling over $550,000.

That’s a significant hit to government funds, illustrating how serious and damaging such fraud can be.

What’s Next for Pascarella

Pascarella is set to face sentencing on September 15. The consequences could be steep — he’s looking at up to three years behind bars, along with supervised release after serving time.

Beyond prison, he may also have to pay restitution and other financial penalties.

The final sentence will be decided by a federal judge who will take into account the official sentencing guidelines and other legal factors.

Who’s Handling the Case

The Justice Department’s Tax Division, represented by Acting Deputy Assistant Attorney General Karen E. Kelly, and the U.S. Attorney for the District of New Jersey, Alina Habba, announced the guilty plea.

The investigation was conducted by IRS Criminal Investigation, and the case is being prosecuted by Assistant Chief Thomas F. Koelbl and Trial Attorney Emerson Gordon-Marvin from the Tax Division.