Tax Preparer Is Indicted 2nd Time

A Pacoima tax preparer, awaiting trial for tax fraud, was indicted for the second time in three years on charges of turning out returns with fake business losses that cost the government $21 million, authorities said Tuesday.

James Earl Wynn, 63, was scheduled to be in court next month to face charges brought against him in 2000 when a new, 24-count federal indictment was issued Friday.

Wynn is accused of preparing more than 2,500 income tax returns showing clients’ taxable income reduced to $0 after losses from nonexistent business partnerships, said Gary Tang, a spokesman for the criminal investigation unit of the Internal Revenue Service.

Wynn apparently duped his clients into thinking that partnerships were beneficial because they either succeeded, and the partners profited, or did poorly, and the partners received tax deductions, Tang said. The clients apparently were not complicit in the crime, he said.

Wynn listed losses of $40,000 to $60,000 on the returns, enough to offset a client’s income, and received 15% to 25% of each tax refund, Tang said.

The clients now must file corrected returns and pay taxes due, in addition to penalties and interest accrued, Tang said.

“The ultimate responsibility falls on the taxpayer to know what’s on their return and that the information is accurate,” he said.

Wynn has been in custody since April 2002, when a federal judge revoked his bail for violating probation by continuing to file false returns, Tang said. According to an affidavit, Wynn has not filed his own income taxes since 1988. Authorities said search warrants and indictments did not deter him.

“He was still out there doing these things, even after his place was searched, after he was indicted and after his place was searched a second time,” Tang said.

Wynn’s offices at 12967 Van Nuys Blvd. were first searched by IRS agents in September 1998. A grand jury first charged him in August 2000, with 14 counts of preparing false income tax returns from 1994 to 1997.

Wynn has reported more than $75 million in losses since 1994, Tang said.

He rarely used his own name as the tax preparer, Tang said. Instead, he would use the names of others, including some who were deceased.

If convicted, Wynn faces a maximum of 72 years in federal prison on the latest charges alone, Tang said.