Minnesota Tax Preparer Convicted of Preparing $1M+ in False Tax Returns for Clients

• WHO: Cortez Hollis, operator of Hollis Tax Time.
• WHAT: Convicted of 20 counts of aiding or assisting the preparation of false tax returns.
• WHERE: Minnesota.
• WHEN: Convicted yesterday; sentencing to be scheduled later.
• STATUS: Awaiting sentencing; faces up to three years in prison per count.

A Minnesota tax preparer was convicted by a federal jury yesterday on charges related to filing false tax returns for clients, resulting in over $1 million in fraudulent losses reported and approximately $387,000 in unentitled refunds.

Cortez Hollis, who owned and operated Hollis Tax Time, a tax preparation business in Minnesota, was found guilty of 20 counts of aiding or assisting the preparation of false tax returns, according to the Department of Justice.

What Happened

According to court documents and evidence presented during the trial, Mr. Hollis utilized his business, Hollis Tax Time, to prepare and submit fraudulent tax returns on behalf of his clients. Authorities stated that Mr. Hollis informed clients he possessed knowledge of tax credits that were unknown to other tax preparers.

The scheme involved Mr. Hollis reporting fictitious businesses that allegedly incurred thousands of dollars in business losses, which his clients did not actually experience. These false tax returns, filed with the IRS, generated substantial refunds that the clients were not entitled to receive. Prosecutors allege that Mr. Hollis frequently collected tax preparation fees of $2,000 or more from these refunds, in some instances without the clients' explicit knowledge.

During the trial, the government presented evidence indicating that Mr. Hollis added more than $1 million in fraudulent losses to client tax returns. This activity sought approximately $387,000 in tax refunds that the clients were not legitimately entitled to, according to authorities.

The Charges Explained

Cortez Hollis was found guilty of 20 counts of aiding or assisting the preparation of false tax returns. This charge typically falls under federal law, specifically 26 U.S.C. § 7206(2). To prove this offense, prosecutors generally must demonstrate that an individual knowingly and willfully aided, assisted, procured, counseled, or advised in the preparation or presentation of a document (such as a tax return) that is false or fraudulent as to any material matter. The penalty for each count can include imprisonment, fines, or both, as determined by a federal court.

How These Cases Move Through Court

Federal criminal cases, including those involving tax fraud, typically begin with an investigation by federal agencies, such as IRS Criminal Investigation. Following an investigation, prosecutors may present evidence to a grand jury, which decides whether there is probable cause to issue an indictment. If an indictment is returned, the accused is formally charged and appears for an arraignment, where they enter a plea of guilty or not guilty.

If a not guilty plea is entered, the case proceeds through discovery, where both sides exchange information, and pre-trial motions. This may lead to a plea agreement, or the case may proceed to trial before a judge and jury. If convicted at trial, as in Mr. Hollis's case, a sentencing hearing is scheduled. During sentencing, a federal district court judge considers the U.S. Sentencing Guidelines, statutory factors, and arguments from both the prosecution and defense before determining the appropriate penalty.

Context & Background

Prosecuting individuals who prepare fraudulent tax returns is a key component of federal efforts to maintain the integrity of the U.S. tax system. The Department of Justice emphasizes that such schemes undermine public trust and result in financial losses for the government, ultimately affecting resources intended for public services. Cases like this highlight the vigilance of federal agencies, including IRS Criminal Investigation and the Justice Department's National Fraud Enforcement Division, in identifying and prosecuting those who attempt to defraud the IRS.

Recognizing and Reporting Fraud/White Collar

Fraud and white-collar crimes can take various forms, from tax fraud to investment scams. Individuals who suspect they may be victims of fraud or have information about fraudulent activities can report them to federal authorities. The Federal Bureau of Investigation (FBI) can be contacted at 1-800-CALL-FBI (1-800-225-5324) or through their local field offices. Additionally, specific tax fraud can be reported directly to the IRS. For immediate emergencies or threats, dial 911.

What Happens Next

Mr. Hollis's sentencing will be scheduled by a federal district court judge at a later date. He faces a maximum potential penalty of three years in prison for each of the 20 counts of aiding and assisting in the preparation of a false tax return. The judge will determine the final sentence after considering the U.S. Sentencing Guidelines and other statutory factors.