Local Tax Preparer Pleads Guilty to Filing False Returns: Feds

A Joliet-area tax preparer will have to pay full restitution after admitting to filing hundreds of false returns and cheating the IRS out of more than $5.3 million, the U.S. Attorney’s office said Wednesday.

Jeffrey Shelby Jr., 31, pleaded guilty at his arraignment last week after being charged in U.S. District Court. Authorities said Shelby owned Shelby Investment LLC, which had locations in Joliet and Crest Hill, from at least 2009 to 2012.

Shelby pleaded guilty to two counts of aiding and assisting in the preparation of false federal income tax returns, the U.S. Attorney’s Office said. He faces a maximum sentence of three years in prison and a fine of $250,000 on each count. U.S. District Judge Sara L. Ellis scheduled a status hearing for March 24 to set a sentencing date.

Shelby admitted that between 2009 and 2012, he filed hundreds of individual income tax returns for clients, each of which fraudulently and intentionally reduced the tax liabilities and increased the tax refunds for those taxpayers, authorities said.

Shelby overstated and misrepresented taxpayers’ eligibility to claim tax credits, including education credits and the Earned Income Credit, along with misrepresenting clients’ business income and expenses and overstating their gifts to charity, the U.S. Attorney’s office said.

As a result, he caused the IRS to lose $5,350,243 in tax revenue, authorities said.

With the 2014 tax season under way, IRS officials said the case is a reminder to tax preparers and taxpayers to comply with tax obligations.

“While most return preparers are honest and provide excellent service, others file false returns to defraud their clients and the United States government,” James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago, said in a press release.