Wichita tax preparer who defrauded IRS of $100,000 sentenced to 18 months in prison

A Wichita tax preparer who admitted to defrauding the Internal Revenue Service of more than $100,000 has been sentenced to 18 months in federal prison.

Sonia Hernandez-Smith, also known as Sonia Raquel Vazquez, was sentenced Tuesday in U.S. District Court after previously pleading guilty to one count of making false statements in a federal tax return. She had originally been charged with 20 counts, but the rest were dropped as part of a plea deal with the U.S. Attorney’s Office.

In addition to the prison time, Hernandez-Smith must serve a year of supervised release and pay $105,050 in restitution and a $100 assessment. She was not fined.

While on supervision, she is banned from preparing taxes for anybody else and is required to file truthful and complete tax returns for herself, according to the judge’s order. Court documents show prosecutors had asked that she be permanently enjoined from filing federal or state tax returns on behalf of third parties.

The maximum penalties were up to 3 years in prison and a fine of up to $100,000.

The federal public defender had asked for a sentence of probation, arguing that imprisonment is a harsher punishment than necessary for the crime.

“Simply done, Ms. Hernandez-Smith checked more boxes than appropriate on her clients’ tax preparation documents,” the lawyer wrote. “Claiming dependents, ‘(checking the box) for the question if the child met the substantial presence test,’ and filling out additional paperwork all took a pen stroke. That’s not to say the offense was not serious, it was. It is to say, however, that retribution is justly served in kind. Her offense was not violent and put no person in danger of life nor limb.”

Hernandez-Smith admitted in court documents that she knowingly prepared income tax returns that falsely claimed tax credits. Prosecutors had alleged that she prepared IRS Form 1040s for clients that claimed the child tax credit, the additional child tax credit and the earned income credit, even though the clients were ineligible.

The result was the clients received bigger refunds from the IRS than they were entitled to.

She committed the crime by obtaining individual tax identification numbers for the children of one client’s niece, even though the children did not live in the U.S. and were thus ineligible for tax credits. She then used those children to claim the Child Tax Credit and the Additional Child Tax Credit for the client.

A similar scheme was used for seven other customers for tax years 2013, 2014 and 2015, Hernandez-Smith admitted.

This story was originally published May 19, 2021 at 10:38 PM.