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An Annandale tax preparer has pleaded guilty to defrauding the Internal Revenue Service out of at least $419,000.

Stanley Kyungjin Cho, 50, of Annandale, pleaded guilty in federal court March 12 to two counts of felony tax fraud in connection with his personal income taxes and his accounting and tax preparation business; Kyung Jin Cho, C.P.A., P.C.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office, made the announcement after the plea was accepted by United States District Judge Leonie M. Brinkema. Cho will face a maximum penalty of three years in prison on each count when he is sentenced June 7.

In a statement of facts filed with his plea agreement, Cho admitted to knowingly making false statements in his personal income tax returns for tax years 2008 through 2011. The false statements resulted in Cho underpaying his federal income taxes by about $262,000, according to court documents.

Cho also admitted during the same three-year period, he knowingly falsified a significant number of tax returns for his clients, resulting in additional losses to the federal government of at least $157,000, according to court records.

The case was investigated by the Internal Revenue Service, which estimates in 2006, the last year for which figures are available, the national tax gap — the difference between total taxes owed and total taxes paid — was estimated to be $385 billion. The IRS estimates that three-quarters of this tax gap was attributable to individual taxpayers.

Under IRS Commissioner Doug Shulman, the IRS initiated a comprehensive review of the tax return preparation industry in 2009. A multi-faceted return preparer regulation strategy was launched the following year to ensure ethical service to taxpayers. “Taxpayers should be very careful when choosing a return preparer. You should be as careful as you would in choosing a doctor or a lawyer,” said Shulman. “While most preparers provide excellent service to their clients, a few unscrupulous return preparers file false and fraudulent tax returns and ultimately defraud their clients. It is important to know that even if someone else prepares your return, you are ultimately responsible for all the information on the tax return.”

gmacdonald@fairfaxtimes.com