A Bellevue, Washington tax preparer was convicted on March 30 of three counts of aiding and assisting in the preparation and presentation of false tax returns, according to First Assistant U.S. Attorney Charles Neil Floyd. Thanjavur Manavalan, owner and operator of Mano Accounting Services, was found guilty after an eight-day jury trial. Sentencing is scheduled for July 15 before U.S. District Judge Lauren King.
The case highlights concerns about fraudulent practices in the tax preparation industry. Prosecutors said that Manavalan's actions involved falsifying various items on clients’ tax returns, including charitable contributions, investment proceeds and basis, business losses, rental income, and private loans. Many clients worked in the tech field and were originally from India; they testified that they trusted Manavalan to file their taxes correctly.
During closing arguments, Assistant United States Attorney Carolyn Forstein told jurors that "the items Manavalan added to the tax returns 'were not typos, they were complete inventions… (For three clients) these businesses did not exist. Manavalan made up businesses with substantial losses in order to deduct the losses on tax returns.'"
Prosecutors noted that Mano Accounting Services filed thousands of returns over several years as its reputation grew by saving clients money through fraudulent means. Special Agent in Charge Carrie Nordyke from IRS Criminal Investigation said: "Taxes can be complicated, but Mr. Manavalan’s scheme was not. He simply lied, going out of his way to falsify his clients’ tax returns... Mr. Manavalan tried to grow his business and increase his profits through fraud, but today’s guilty verdict puts an end to these schemes." The trial examined twelve different tax returns from 2018-2020 containing false information; the jury convicted on three counts.
Manavalan's attorneys argued that responsibility lay with the taxpayers who provided information for their filings; however Assistant United States Attorney David T. Martin countered this argument by saying: "Manavalan found an extremely dishonest group of clients." Martin continued: "The reality was that 'Manavalan took a kernel of truth and made it into a lie on the tax return.'"
Aiding and assisting with filing a false return carries a penalty of up to three years in prison. The case remains under investigation by IRS Criminal Investigation.
