Fraudulent tax preparation scheme involved over $500,000 in fraudulent claims

NEW YORK – A 42-year-old Nanuet tax preparer has been convicted of 18 counts of aiding and assisting in the false preparation and filing of tax returns.

According to the evidence presented at trial, Timothy Mitts prepared well over 100 fraudulent tax returns for the tax years 1997 through 2004. The returns under reported taxes by at least $500,000. Many of the returns were amended returns that requested refunds for taxpayers for businesses that did not exist.

According to the taxpayers, they had no idea that their returns were fraudulent. In the majority of cases, Mitts simply made up expenses, deductions, business losses, etc. in order to create a refund or avoid tax liability.

The precise method varied on individual returns, but the following are types of fraudulent representations that he made on returns: false office expenses, insurance expenses, interest expenses, and other business losses. In the majority of instances, Mitts made up partnerships that did not exist. He then created losses for the partnerships that he used to offset other income from the taxpayers. All of the taxpayers have stated that they relied on Mitts and simply signed the return without double checking or reviewing Mitt’s work.
Several witnesses testified that Mitts told them he was CPA and a former I.R.S. fraud examiner. Mitts denied ever stating this to clients.

On cross examination, however, Mitts was presented with a classified advertisement for “Timothy Mitts, CPA.” The advertisement listed his phone number. Mitts also testified that all of his former clients that testified at trial were mistaken when they stated he mislead them about the nature of their returns.