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Orange County Tax Return Preparer Arrested on Tax Fraud Charges

Posted by Fay Arfa | Apr 20, 2016 | 0 Comments

LOS ANGELES– The owner of a Tustin tax preparation business called First Quality Tax Services was arrested this morning on federal charges that allege he prepared and filed fraudulent federal income tax returns claiming false deductions for his clients.

Thomas P. Butcher, 61, of Rancho Santa Margarita, was arrested by special agents with IRS Criminal Investigation pursuant to an indictment returned by a federal grand jury on April 13.

The 38-count indictment charges Butcher with 37 counts of aiding and assisting in the preparation of fraudulent income tax returns and one count of obstructing the administration of Internal Revenue laws.

The indictment alleges that for tax years 2009 through 2011, Butcher prepared and filed tax returns that claimed false credits and deductions that clients were not entitled to receive. The tax returns included fraudulent education credits, as well as false deductions for charitable donations and unreimbursed employee expenses. The fraudulent deductions and credits lowered the taxpayers' income tax liability.

The indictment also alleges that Butcher submitted bogus receipts for charitable donations and employee-related expenses when filing 2009 tax returns.

“Today's tax deadline reminds us that our system depends on every citizen filing honest income tax returns,” said United States Attorney Eileen M. Decker. “Butcher is charged with systematically filing false and fraudulent returns for his clients without their knowledge. Butcher's arrest underscores this office's commitment to protect innocent taxpayers and preserve the integrity of our tax system through the prosecution of corrupt tax professionals.”

Butcher is expected to be arraigned on the indictment this afternoon in United States District Court in Santa Ana, California.

An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed to be innocent until proven guilty in court.

Each of the 38 counts in the indictment carries a statutory maximum penalty of three years in federal prison.

This case is the product of an investigation by IRS Criminal Investigation.

“On this final day of the 2016 tax filing season, those who might consider preparing false tax returns are reminded of the extremely negative consequences of doing so,” stated IRS Criminal Investigation's acting Special Agent in Charge Anthony J. Orlando. “Today's arrest of Mr. Butcher again emphasizes that the Internal Revenue Service and U.S. Attorney's Office will continue their aggressive pursuit of those who attempt to defraud America's tax system.”

Return preparer fraud is one of the Internal Revenue Service'sDirty Dozen Tax Scamsfor 2016. The IRS has some tipson their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. Additional information about and enforcement efforts by the United States Department of Justice may be found on the Tax Division'swebsite.

USAO – California, Central Updated April 18, 2016

Central District of California DOJ / Release No. 16-076 / April 18, 2016

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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