
Mo’ Money (a tax preparation service) did amount to mo’ problems for businesses operator Teresa Chism, who was sentenced Tuesday to five years in prison for filing fraudulent tax returns.
Under business names Mo’ Money, MoneyCo USA and Lady T Taxes, Chism manipulated information in her clients’ returns to boost their tax refunds, according to a release from the U.S. Department of Justice.
Between 2002 and 2015, Chism prepared 550 false income tax returns in an attempt to garner over $3.5 million in bogus tax returns for clients in her Durant community, located in the poorest county in the nation. She did this by reporting false wages, self-employment income and expenses, and education credits.
“By lying and cheating our tax system, this defendant stuck her hand in every American’s pocketbook and stole money that should have gone to our families, our communities and our kids’ futures,” U.S. Attorney Mike Hurst said in the release.
Holmes County, where nearly half of residents live in poverty, is also among the most heavily audited places in the country, according to data compiled by ProPublica in April. While the Internal Revenue Service audits fewer than eight out of every 1,000 tax returns across the U.S., it audits more than 11 out of 1,000 in Holmes County. Neighboring Humphreys County is the single most audited county in the nation.
In examining why the Mississippi Delta has among the highest rates of income tax audits in the nation, Mississippi Today discovered a complicated set of challenges for those taxpayers, including a lack of documentation of income and residency. Folks who claim the Earned Income Tax Credit, which is a federal assistance program that provides additional funds on top of tax refunds for poor families, are twice as likely to be audited than taxpayers who earn $400,000.
Many low-wage workers rely on lump sum tax returns to meet needs they’ve staved off all year, heightening the tension surrounding tax season. Belzoni tax preparer Latoya Skinner told Mississippi Today some tax preparers are uneducated about tax law and IRS processes while others are willing to take advantage of their clients.
This past tax season, Hurst warned Mississippians to avoid using tax preparers who promise larger returns than competitors or base their fees on how large a return they can get.
Chism pleaded guilty to the charges last August. In addition to five years in prison, U.S. District Judge Henry T. Wingate also ordered Chism to serve three years of supervised release and pay $135,134 in restitution to the IRS.
“It is a great day for every taxpaying citizen when a participant in their criminal scheme is held accountable. With the recent conclusion of tax filing season, others who have attempted similar thefts from the US Treasury should be aware that the special agents of IRS – Criminal Investigation will continue the aggressive pursuit of those individuals who attempt to defraud America’s tax system,” IRS criminal investigator Thomas J. Holloman III said in the release.
Another tax preparer from Starkville, Jameka Coffey, pleaded guilty last August to helping file fraudulent tax forms and in 2016, Brandon tax preparer Kushauntia Jones was sentenced to 20 years in prison for her own tax return scheme.
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