North Texas tax preparer sentenced to federal prison for tax fraud scheme

TYLER, Texas - A Terrell man has been sentenced to federal prison and ordered to pay restitution for federal violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Toronto Henderson, 49, pleaded guilty to conspiracy to aid, assist, counsel or advise in tax fraud and was sentenced to 24 months in federal prison by U.S. District Judge Jeremy Kernodle on October 16, 2024. Henderson was also ordered to pay $373,230.00 in restitution.

According to information presented in court, Henderson was an owner of two tax return preparer businesses. Henderson recruited tax preparers to work at the businesses to prepare and file income tax returns for clients. Henderson, or others at his instruction, personally trained the preparers. As part of the training, preparers were instructed on how to complete tax returns for clients. Henderson and others created a scheme to defraud the United States by instructing the tax preparers to create, among other things, fraudulent Schedule Cs on personal income tax returns. The Schedule C, Profit or Loss From Business, is designed to permit a taxpayer to report income received and expenses incurred from operating a business. At Henderson's instruction, and the instruction of others known to Henderson, preparers used taxpayer information unrelated to operation of any business or created fictitious and false information with respect to operation of a business, so that the taxpayer could claim business losses to which the taxpayer was not entitled. This scheme permitted the taxpayer to receive a refund to which the taxpayer was not entitled. The tax returns, including the fraudulent Schedule Cs, were filed by Henderson or employees working at his instruction. The tax preparation businesses were paid a fee by the clients for preparing and filing the returns. The offense resulted in a total tax loss of $373,230.00.

This case was investigated by the Internal Revenue Service-Criminal Investigations and prosecuted by Assistant U.S. Attorney Alan Jackson.

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