Tax Preparation Business Owner Sentenced to Federal Prison for Committing Tax Fraud

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FILE PHOTO: Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

SHREVEPORT, La. Marie Kemp, 58, of Benton, Louisiana, has been sentenced by United States District Judge Elizabeth E. Foote to spend 30 months in prison, followed by 1 year of supervised release, United States Attorney Brandon B. Brown announced.  Kemp was ordered to pay a fine in the amount of $50,000 and restitution in the amount of $1,069,609 to the Internal Revenue Service (IRS). In addition, Kemp was permanently enjoined from the preparation of tax returns for anyone other than herself.

Marie Kemp was indicted by a federal grand jury on tax fraud charges in March 2018. She pleaded guilty on October 4, 2021, to making and subscribing a false tax return. Kemp worked in the tax return preparation business for approximately 20 years. In 2008, she opened Marie’s Tax Service with locations in Bossier City, Minden, and Ringgold, Louisiana, and was the sole proprietor.

Marie’s Tax Service prepared and submitted client tax returns electronically to the IRS. Kemp earned over $3 million in gross receipts for fees charged for the preparation and filing of client’s individual tax returns during the tax years 2011 and 2012 from her tax preparation business. Kemp did not register her business as a corporation with the IRS until 2018 and therefore, the business income of her tax preparation business should have flowed into her personal income tax return reportable on Schedule C.

Kemp personally prepared and electronically filed her 2011 and 2012 U.S. Individual Income Tax Returns, Forms 1040, with the IRS and underreported her business income. Kemp reported false figures in total gross receipts for her tax preparation business on Schedule C and losses and income on her Form 1040. These false amounts which she reported on her return were substantially lower than what the actual amounts were. Kemp’s 2012 tax return did not include a Schedule C for her tax preparation services business and false amounts were reported on Form 1040.  

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According to evidence presented in court, Kemp only reported taxable income in the amount of $1,819 for tax year 2011, when in truth and in fact, her taxable income was $1,604,208. For the tax year 2012, Kemp did not report any income from her tax preparation business, when in fact she knew that her taxable income should have been $1,632,795. Because of her false reporting, Kemp owes taxes for years 2011 and 2012 in the amount of $1,069,609.

“Tax season is upon us, and this case should be a strong reminder that all citizens are subject to tax laws and should abide by them,” said U.S. Attorney Brandon B. Brown. “Whether you are a paid tax preparer or one who files your own taxes, we must all adhere to the tax laws of the United States. This office will continue to work with the IRS to deter this type of criminal activity in the Western District of Louisiana.”

“Today’s sentencing of Marie Kemp again emphasizes the Internal Revenue Service and U.S. Attorney’s office will continue their aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation’s tax system,” said James E. Dorsey, IRS Criminal Investigation Special Agent in Charge, Atlanta Field Office. “Honest taxpayers have been reassured today that no one is above the law–especially when the integrity of tax administration is at stake.”

This case was investigated by the IRS – Criminal Investigation and was prosecuted by Assistant U.S. Attorneys Mary J. Mudrick and Mike Shannon.

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