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Tax Pro Nailed on 33 Fraud Counts

 A tax preparer, who claimed to be an expert on issues involving Australian expatriates, has been found guilty of 33 counts of tax fraud. John Anthony Castro, owner of Castro & Co., a virtual tax firm, was found guilty by a judge in a Texas District Court in a bench trial recently/

Castro, who graduate law school but repeatedly failed the bar exam, held himself out as an in international tax expert and federal practitioner and also falsely claimed to have graduated from the West Point military academy.

Between 2017 and 2019, he filed more than 1,900 tax returns for individuals from around the world, promising clients a significantly higher refund than they would received otherwise and he would split the refunds with them.

Castro did not show the prepared returns to clients, simply telling them the amount of the anticipated refunds, and on many occasions, filed returns without their knowledge.

Among his acts was claiming more than $90,000 in deductions for unreimbursed employee expenses for a client with about $103,000 in income. He also claimed deductions that were extreme legal theories for example, claiming any expense related to preventing an illness qualified as an “impairment related work expense" and also, filing deductions for commuting expenses and dry-cleaning for work clothes.

In addition, he  deducted $26,000 in expenses for a startup cupcake business with $250 in revenue

In February 2018, Castro told and undercover IRS-CI agent that an in-person meeting required a $5,000 retainer, so instead, they exchanged emails.

When taxpayers learned of Castro’s actions, many demanded copies of their returns, but he refused to discuss issues with them and delayed providing returns for months at a time. He was also found to have been highly vindictive when questioned or challenged. Castro would berate individuals in emails, threaten legal actions, and in some cases, filed amended tax returns that removed all deductions, causing the taxpayer to owe the IRS tens of thousands of dollars.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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