Lakewood man pleads guilty to tax fraud that previously sent his father to prison
A Pierce County tax preparer accused of filing fraudulent returns on behalf of his clients has pleaded guilty in U.S. District Court in Tacoma.
Cleo J. Reed, Jr., 51 of Lakewood, pleaded guilty Monday to “aiding in preparation and presentation of false tax returns,” the U.S. Attorney’s Office said in a press release.
The press release said Reed’s companies — “Just Us Tax Services” that later became part of “Young’s Tax Services” — got higher refunds for their clients by claiming higher Earned Income Tax Credits than allowed, which netted Reed’s companies more for preparing the taxes.
“According to records filed in the case, in 2011 and 2012, even as Reed Jr.’s father’s tax preparation business was under investigation for preparing fraudulent returns, Reed, Jr., opened and operated ‘Just Us Tax Service’ so that his father could continue filing tax returns on behalf of clients, by filing them in the name of a tax preparation firm that was different than the name of the tax preparation firm the IRS was investigating,” the press release said.
His father, Cleo Reed, Sr., was sentenced to 2-1/2 years in prison in 2013.
Reed, Jr. started filing fraudulent returns using the same “fraudulent technique utilized by his father’s tax preparation business,” the press release said.
Reed, Jr. agreed to pay the Internal Revenue Service $39,899 in restitution, and there might also be interest and civil tax penalties.
“When the IRS terminated Reed, Jr.’s tax preparation registration, he had an acquaintance open and register ‘Young’s Tax Service’ in 2014 and continued filing tax returns with fraudulent entries for Earned Income Tax Credit,” the press release said. “Reed, Jr., filed the false returns from his home and from Everyday Essentials, the marijuana dispensary he owned and operated in Puyallup.”
He faces up to three years in prison when he is sentenced May 10.
