New York tax preparer charged with causing more than $100 million in losses from fraudulent returns

A

New
York
tax
preparer
was
arrested
Monday
on
charges
related
to
causing “substantially”
more
than
$100
million
in
tax
losses
through
the
filing
of
false
returns
—
one
of
the
largest
tax
frauds
ever
by
a
preparer,
federal
prosecutors
said.

The
preparer,
Rafael
Alvarez,
orchestrated
a “wide-ranging
scheme”
at
his
Bronx
firm
ATAX
New
York “to
file
tens
of
thousands
of
federal
individual
income
tax
returns”
that
included
false
information
to
reduce
the
tax
liability
of
their
filers,
according
to
prosecutors.

The
false
information
allegedly
included
bogus
itemized
deductions,
fake
capital
losses,
and
phony
business
expenses
and
tax
credits.

“Many
of
the
numbers
that
Alvarez
entered
were
completely
fictitious,
and
were
not
supported
by
any
evidence
or
documentation,”
an
indictment
against
him
alleges.

The
60-year-old
Alvarez
became
known
to
customers
as “The
Magician”
for
his “ability
to
make
customers’
tax
burden
disappear,”
said
Manhattan
U.S.
Attorney
Damian
Williams
on
Monday,
the
deadline
for
most
Americans
to
file
their
income
tax
returns.

ATAX
New
York
grossed
more
than
$15
million
from
2016
through
2019,
according
to
Thomas
Fattorusso,
the
IRS
special
agent
in
charge
of
criminal
investigations.

Alvarez
was
the
CEO,
owner
and
manager
of
ATAX
from
2010
through
2020,
and
the
firm
during
that
time
prepared
more
than
90,000
income
tax
returns,
according
to
prosecutors.

In
2021,
a
Manhattan
federal
court

judge
permanently
barred
Alvarez
and
ATAX
from
preparing
federal
tax
returns
for
others,
after
the
Manhattan
U.S.
Attorney’s
Office
alleged
in
a
civil
complaint
that
he
and
the
company
had
prepared
and
filed
fraudulent
returns
for
others.

Alvarez
and
ATAX
agreed
to
pay
$159,600
to
the
United
States
in
disgorgement
in
that
case.

Alvarez,
who
lives
in
Cortlandt
Manor,
New
York,
is
charged
in
the
new
criminal
case
with
one
count
of
conspiracy
to
defraud
the
United
States
and
making
false
statements,
which
has
a
maximum
five-year
prison
sentence
if
he
is
convicted,
along
with
four
counts
of
aiding
and
assisting
preparation
of
false
and
fraudulent
U.S.
individual
income
tax
returns
and
attempting
to
interfere
with
the
administration
of
the
internal
revenue
laws.

He
also
is
charged
with
aggravated
identity
theft,
which
carries
a
mandatory
minimum
sentence
of
two
years
in
prison
if
he
is
convicted.