Officials allege tax scam – Local preparer indicted on charge of preparing false returns

Published 6:43 am Wednesday, February 14, 2007

By By Kerry Whipple Bean – publisher
A local independent tax preparer has been arrested on a grand jury indictment on eight counts of preparing false tax returns, law enforcement officials said Tuesday.
Amy Madsen, of 2050 Pea Ridge Road in Brewton, was originally held on $250,000 bond, but that was reduced to $25,000 under a conditional agreement, District Attorney Steve Billy said.
Under conditions of the bond reduction, Madsen will not be able to prepare any tax returns this year and she will have to return any tax documents to customers within two weeks, Billy said.
Madsen will now be on an Internal Revenue Service tax preparer watch list, Billy said.
The charges relate to accusations Madsen underreported her own income and incorrectly prepared returns for some customers, Billy said. The state Department of Revenue led the investigation, with Special Agent Robert McVey Jr. in charge.
According to the indictment, five of the counts allege Madsen claimed deductions for customers who were not entitled to them, in amounts as high as $21,000.
The indictment states Madsen knew the customers were not entitled to those deductions.
Customers were not aware of the fraud, Billy said, until they were contacted by the Department of Revenue.
According to the indictment, Madsen also underreported her own income in 2003, 2004 and 2005.
The indictment says she claimed to have earned $6,526 in taxable income in 2003, while she actually made $63,084.
In 2005, she reported taxable income of $6,693, while she actually made $40,037.60 in 2004, according to the indictment.
And last year, she reported taxable income of $1,017 in 2005, while she actually made $39,219.56, the indictment alleges.
Anyone with questions about tax returns prepared by Madsen can call Steve Parker at 867-9588, Billy said.

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