Federal Tax Fraud Sentencing: Probation Below Guidelines

Federal tax fraud sentencing: Can you get probation?

Clyde Gibson Jr. collected 13 character letters before sentencing. Three came from his children. He wanted us to read those.

"You have to read them. They did an amazing job."

He had pleaded guilty to preparing false income tax returns and faced 12 to 18 months in federal prison. He was getting ready to leave his family.

The computer repair business that didn't exist

Clyde prepared tax returns from his home in Hartford, Connecticut. Between 2018 and 2022, the IRS flagged refund rates of 96 to 99 percent on his returns, along with business expenses, dependents, and capital losses that taxpayers could not back up.

An undercover IRS agent brought him a W-2 and nothing else. Clyde filed a return claiming a computer repair business with $4,500 in expenses and a $3,000 capital loss carryover. Neither existed.

Investigators interviewed 30 of his customers. They found more invented Schedule C businesses, dependents the taxpayers had never reported, and the same $3,000 capital loss on return after return. The IRS put the tax loss at $126,000.

On September 11, 2024, Clyde sat through a reverse proffer with his attorney while Assistant U.S. Attorney Elana Coronado and IRS Agent Taulant Baci laid out the evidence. He pleaded guilty to aiding and assisting in the preparation of false returns under 26 U.S.C. § 7206(2): offense level 13, criminal history category I, plus restitution to the IRS.

Back to class

Clyde enrolled in tax compliance courses, the subject he had broken the law in. He kept every record of the coursework. He started volunteering, opened a Prison Professors profile, and logged each activity as he finished it. He joined our Tuesday webinars and kept showing up.

His narrative laid out the fake business expenses and capital losses, his background, and the classes. Probation received it before his interview. By Clyde's account, the officer complimented it afterward.

At sentencing, the judge talked about what his children had written.

Probation

Clyde says the prosecutor told the court he was not a continuing threat and was unlikely to reoffend.

The judge sentenced him to two years of probation. No prison. No halfway house.

"You told me back in September that I could possibly get probation and I didn't believe it because my lawyer said I was going to jail, but I did what you said, I did the work, and it all paid off in the end."

"I've been on every webinar and I have a site on Prison Professors. I took tax classes. I did everything I could do and they seen the type of person I was and not for the crime that I committed."

Open Clyde's Prison Professors profile and look at the dates on his entries. Then log the first entry on yours today.

Thank you,

Justin Paperny