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Criminal Corner

We are committed to closing California’s $6.5 billion tax gap, defined as the difference between tax that is owed, and tax that is paid. Our special agents work cooperatively with law enforcement agencies throughout California to uncover illegal behaviors that contribute to the tax gap. These include underreporting income, overstating deductions, failing to file returns, failing to pay taxes due, and making illegal cash payments to employees.

Tax fraud is not a victimless crime. You can report suspected tax fraud by calling FTB at (800) 540-3453.

Inland empire tax preparer sentenced on state tax fraud

A Riverside tax preparer pleaded guilty to one count of state income tax fraud for filing fraudulent returns on behalf of her clients.

Debbie Lynn Kleitz, 52, owns and operates Kleitz Tax Service. Kleitz was sentenced to 120 days in jail, three years probation, and was ordered to pay restitution to the FTB of more than $43,800 representing the tax, fines, and cost of the investigation. In addition, she can only file fully completed tax returns.

According to court documents, Kleitz fraudulently filed married clients’ tax returns using either head of household status or single filing status. In some cases, Kleitz would also fraudulently inflate child and dependent care expenses to further increase the size of the refund. Kleitz benefited by charging the clients for two prepared returns rather than one married filing joint return.

In one example, Kleitz filed a false state income tax return for each spouse and inflated one spouse’s child and dependent care credit expenses. That spouse received a $1,344 refund while the other received a $531 refund. The couple’s correctly filed amended state income tax return resulted in a $620 state income tax refund.

The case was discovered by FTB’s internal fraud detection group.