A Rocky Mount tax preparer admitted participating in a scheme that caused approximately $3.9 million in federal tax losses.
Angela Dickens helped prepare hundreds of returns containing inflated withholding amounts between 2017 and 2023. The false figures increased clients’ refunds and allowed the people behind the operation to collect excessive preparation fees.
Dickens, 54, operated Empire Tax Service, which was later renamed K&J Tax Service. According to WCTI News 12, she pleaded guilty to one count of aiding and assisting in the preparation of false tax returns.
She agreed to pay restitution to the IRS and faces up to three years in federal prison. Her sentencing is scheduled for November 2026.
Hundreds of Returns Included Inflated Withholding
Dickens operated the tax preparation businesses in North Carolina and worked with at least one other person during the six-year scheme. Prosecutors said the returns contained inflated amounts listed as “Other 1099 Withholding.” Increasing those figures made it appear that clients had already paid more federal tax than they actually had.
The resulting returns claimed larger refunds from the IRS. Federal officials did not disclose the exact number of returns or provide a year-by-year breakdown of the approximately $3.9 million tax loss.
The scheme benefited the tax preparers because fees were collected from the inflated refunds, according to the U.S. Attorney’s Office for the Eastern District of North Carolina. Prosecutors described those fees as excessive. The Justice Department’s announcement does not say whether the taxpayers whose returns were filed knew that the withholding information had been falsified.
She Faces Up to Three Years in Federal Prison
Chief U.S. District Judge Richard E. Myers II accepted Dickens’ guilty plea on August 4. The offense carries a maximum possible sentence of 36 months in federal prison.
Dickens also agreed to pay restitution to the IRS. The precise restitution amount will be determined later and was not included in the plea announcement.
IRS Criminal Investigation handled the case. Dickens is expected to be sentenced in November 2026, when the court will determine her punishment and the amount she must repay.
Review Every Figure Before Allowing a Return to Be Filed
Taxpayers remain responsible for the accuracy of the information on their returns even when they pay someone else to prepare and submit them. Before signing or authorizing electronic filing, they should compare reported wages, income and federal withholding with every Form W-2, Form 1099 and other tax document they received.
A refund that is substantially larger than expected should be explained with specific deductions, credits or withholding records. Taxpayers should not accept assurances that a preparer has a special method for producing a larger refund, and they should never sign a blank or incomplete return.
The IRS advises taxpayers to use a preparer who signs the return and includes a valid Preparer Tax Identification Number. It also warns against preparers who calculate their fees as a percentage of the refund or direct refunds into accounts they control.
Taxpayers should obtain a complete copy of the filed return and confirm that any refund is being deposited into their own account. Suspected misconduct, including false or inflated withholding, can be reported through the IRS using Form 14157.