A New Jersey man named Vito A. Pascarella, who lived in Somerset, recently pleaded guilty to charges related to preparing false tax returns for his clients. Court documents and statements made in court revealed that Pascarella operated a tax preparation business. Through this business, he prepared, and also caused others to prepare, tax returns that included false information.
On these false tax returns, Pascarella reported incorrect wage numbers. He also falsely claimed that some of his clients owned and operated businesses that they did not actually own or operate. Moreover, Pascarella falsely reported that these supposed businesses earned gross receipts and had business expenses, even though these details were not true.
Because of these false claims on the tax returns, Pascarella caused a significant tax loss to the Internal Revenue Service (IRS). The total tax loss resulting from these false returns exceeded $550,000.
Details of the False Tax Returns
The false information included in the tax returns went beyond simple errors. Pascarella knowingly prepared returns with made-up wages and fabricated business ownership. This means that the tax returns showed clients earning money from businesses they did not have and showing expenses for these businesses that were not real.
By doing so, the tax returns inaccurately represented the clients’ income and deductions. This fraudulent reporting ultimately affected the amount of taxes owed and paid to the IRS.
Legal Penalties and Sentencing
Pascarella is scheduled to be sentenced on September 15. According to the charges, he faces a maximum penalty of three years in prison. In addition to potential jail time, Pascarella may be subject to a period of supervised release after any prison sentence.
He could also be ordered to pay restitution, which means repaying the money that was lost by the IRS due to the false tax returns. Monetary penalties may also be imposed. A federal district court judge will decide the exact sentence after reviewing the U.S. Sentencing Guidelines and other statutory factors.
Case Announcement and Investigation
The case was publicly announced by Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division, along with U.S. Attorney Alina Habba for the District of New Jersey.
The IRS Criminal Investigation unit was responsible for investigating this case. The prosecution team includes Assistant Chief Thomas F. Koelbl and Trial Attorney Emerson Gordon-Marvin from the Tax Division.
