James Otto Price, III, of Jacksonville was sentenced this month to 30 months in federal prison for willfully preparing false tax returns. The court also entered a money judgment against Price in the amount of $216,454.00, according to the U.S. Attorney for the Middle District of Florida.

According to the Internal Revenue Service, Price has the dubious honor of being the first tax preparer in the country to be found guilty and sentenced for committing tax fraud involving the First-Time Homebuyer Credit.

According to court documents, in at least fifteen tax returns prepared by Price for tax year 2008, he falsely claimed that the taxpayers were eligible to receive the First-Time Homebuyer Credit made available by Congress pursuant to the Housing and Economic Recovery Act of 2008. A number of the taxpayers who Price claimed were eligible for the homebuyer credit were not even aware that Price had claimed a First-Time Homebuyer Credit on their returns. Other clients were (incorrectly) advised by Price that if they merely contemplated buying a house in the upcoming months, they were eligible for the credit.

Federal prosecutors believed that Price knew that the taxpayers did not qualify for the credit.  Price was reportedly able to pay himself fees of approximately $1,000 per fraudulent tax return by electronically debiting this amount from the $7,500 home buyer credit and tax refund proceeds wrongly received by his clients.

In addition to the First-Time Homebuyer Credit returns, Price reportedly also fraudulently prepared 20 additional tax returns involving tax years 2004 and 2005. In those returns, Price intentionally overstated or made up charitable contributions and business expenses as well as false businesses.

Government Fraud

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