Former Maryland Tax Preparer Sentenced for Preparing False Returns

A Minnesota woman was sentenced today to 15 months in prison for preparing false tax returns on behalf of her clients.

According to court documents and statements made in court, Kymberly Starr owned and operated The Tax Lady, also known as 5 Starr Business Solutions, a tax preparation business in Maryland. From 2013 to at least 2018, Starr inflated her clients’ tax refunds by preparing and submitting to the IRS false tax returns that claimed fraudulent tax deductions and fictitious business profits and losses. Starr’s conduct resulted in approximately $400,000 of tax loss to the IRS.

Additionally, in 2020 and 2021, Starr obtained over $83,000 in COVID-19-related Paycheck Protection Program (PPP) loans by submitting fabricated IRS forms containing purported bogus businesses and business income. Starr also used fabricated federal tax forms to file a false claim for unemployment insurance with the Maryland Department of Labor, from which she received over $55,000.

In addition to her prison sentence, U.S. District Judge Theodore D. Chuang for the District of Maryland ordered Starr to serve one year of supervised release and to pay approximately $539,043 in restitution to the United States and Maryland.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS Criminal Investigation investigated the case.

Trial Attorneys Shawn Noud and Ezra Spiro of the Tax Division prosecuted the case.