Gary tax business owner agrees to leave business for good
By Teresa Auch Schultz firstname.lastname@example.org March 28, 2013 4:30PM
Updated: May 1, 2013 2:44PM
The owner of a Gary tax preparation business accused of milking the federal government out of at least $35 million, leaving perhaps more than 14,000 clients on the hook for the lost money, has agreed to leave the business forever.
According to an agreement granted Wednesday, John Newlin also agrees to give a list of all his customers from 2008 to 2012 to the federal government so the government can notify them that Newlin and his company, Quick Sam’s Tax Refunds, are barred from filing their income tax returns. His company filed about 14,000 returns in the last three years it operated.
The government sued Newlin a year in the U.S. District Court in Hammond, claiming that he and his employees took bogus credits on their clients’ returns. Of a group of 146 income tax returns Quick Sam’s prepared, 94 percent of them were fraudulent.
Newlin had his employees ask leading questions of the clients, such as asking if the client had ever gone to school, giving them a deduction for that. In certain cases, employees told clients that if the client didn’t have any children, the employee had one and the employee could sell the child’s deduction to the client.
Quick Sam’s took so many deductions from one client, the client owes the IRS more than $21,000.
It did not appear the client knew what Quick Sam’s was doing was wrong.
Federal officials claimed Newlin continued his fraud even when he knew he was being investigated. Court records estimate the loss to the IRS at as much as $35 million.
At least four of his former employees have pleaded guilty to federal criminal charges in connection to the case. Newlin has not been charged with any criminal counts, but the injunction agreement says the government may still bring charges.