Tax Preparer Jailed for Preparing Fraudulent State Tax Returns
RALEIGH – A Garner tax preparer received an active prison sentence
Wednesday after pleading guilty to tax charges filed by the North
Carolina Department of Revenue.
Nathan Herbert Miller, 59, of 4808 Durgancroft Place, Fuquay-Varina,
entered guilty pleas in Wake County Superior Court to 29 felony counts
of aiding or assisting in the preparation of fraudulent North Carolina
individual income tax returns. He owned and operated Herbert Miller
Tax Service, located at 1201Aversboro Road in Garner.
Wake County Superior Court Judge James C. Spencer, Jr. sentenced
Miller to a 13-month minimum, 16-month maximum active prison term
in the North Carolina Department of Corrections. He was immediately
taken into custody to begin serving his sentence. Miller was prohibited
from preparing tax returns for others upon completion of his sentence.
The state’s evidence showed that Miller prepared over 3,800
individual income tax returns for taxpayers from 40 different counties
for the 2001, 2002, and 2003 tax years. Approximately 60 percent of
his clients were car salesmen. Miller materially overstated the itemized
deductions and business expenses on his clients’ federal tax
returns, which caused the Department of Revenue to issue larger state
tax refunds to the individuals than they were legally entitled to
Miller worked for several state agencies before retiring from the
North Carolina Department of Insurance as a financial crimes investigator.
The Department of Revenue’s investigation found that Miller
led his clients to believe he was a former Internal Revenue Service
agent, a former state auditor, or a certified public accountant, although
he was not. Miller claimed that he put only information on the returns
that his clients provided to him; however the investigation found
that many of his clients did not review their completed tax returns
and were unaware of the information Miller had included.
Miller attempted to obstruct the state’s investigation by asking
some of his clients to create false documents that would substantiate
the fraudulent deductions and business expenses he had included on
their returns. He urged them to use various techniques such as creating
mileage logbooks using ink in different colors to make it appear that
they were legitimate or washing documents and drying them in a microwave
oven so that they would appear old.
The Department of Revenue is auditing of all of the returns that
appear to have problems. The state has already completed 316 audits
and has an additional 1,200 audits scheduled. So far, the state has
assessed $557,772 in back taxes as a result of this scheme and additional
criminal charges are possible.
The charges against Miller resulted from an investigation by the
Department’s Discovery and Special Projects Unit and a special
agent with the Department’s Criminal Investigations Division.
Public Affairs Office
P.O. Box 25000, Raleigh, NC 27640-0001
An Equal Opportunity Employer
Last modified on:
10/31/07 03:43:56 PM