A Medford woman accused of fraudulent tax preparation has settled with the state, paying a fine and agreeing to never again prepare taxes in the state of Oregon.
In a deal with the Oregon State Board of Tax Practitioners and the Oregon Department of Justice, Tirsa Villanueva — also known as Tirsa G. Fong-Guien — agreed on March 8 to give up her tax preparer's license and cease work in the tax preparation business in Oregon. She also was fined $25,000.
The licensing status of tax professionals in Oregon can be checked on the State Board of Tax Practitioners' website at www.or.gov\application\obtpsearch or by calling the board at 503-378-4034.
According to a Justice Department release, Villanueva catered to the Hispanic and immigrant community as a "notario." In Latin American countries, "notario publicos" are qualified professionals who offer a variety of consumer and legal services. But the Justice Department release said in the U.S., people who are unlicensed or inadequately trained often hold themselves out as notarios to immigrant communities.
Villanueva had her own tax preparation business and for a time worked for Liberty Tax Service.
The Board of Tax Practitioners received complaints about Villanueva starting in 2006 and in September of that year issued a civil penalty of $2,400 against her for preparing 12 returns without the supervision of a tax consultant.
In 2008, the Oregon Department of Revenue conducted an audit of about 10 percent of the approximately 1,500 returns Villanueva had prepared.
The auditors concluded that more than 80 percent of the audited returns had to be adjusted because of errors, resulting in more than $155,000 in additional taxes collected as well as interest and penalties imposed on the unsuspecting taxpayers.
The tax board found that Villanueva consistently engaged in fraudulent and deceptive conduct by filing for unearned credits and deductions for her clients. Those included claiming unqualified dependents, unearned education credits and incorrect estimates of business expenses.
According to documents provided by the Department of Justice, in one case Villanueva prepared taxes for a single man and claimed he had five dependents — nieces and a nephew who actually lived in Mexico.
She also was accused of preparing taxes for a couple who claimed as dependents five grandchildren and sisters and took two additional deductions by incorrectly claiming two of the dependents were disabled.
Additionally, Villanueva had her clients incorrectly declare residency in Idaho to claim an Idaho tax credit for grocery purchases.
On Jan. 25, 2012, Villanueva was indicted by a Jackson County grand jury on 18 class C felony charges related to her preparations of returns in the 2008 tax year.
In March 2012, the tax board issued a cease-and-desist order after learning that Villanueva was preparing, advising or assisting in the preparation of personal income tax returns in the Medford and Grants Pass area.
However, the Justice Department says, she was still advertising her tax preparation services on the Internet in July 2012.
According to the settlement signed by Villanueva, the Tax Board found that she committed 183 violations of engaging in dishonesty, fraud or deception relating to the preparation of personal income tax returns. She also was accused of three violations for advertising her services and one violation for failing to register her tax preparation business with the tax board.
Criminal charges against Villanueva were ultimately dismissed in October 2012, but the tax board pursued the case civilly, resulting in the settlement reached this month, officials said.
Reach reporter Mandy Valencia at 541-776-4486 or firstname.lastname@example.org.