Tax Preparer from New York, nicknamed ‘the Magician’, admits to submitting thousands of fraudulent tax returns
On Tuesday, federal authorities revealed that a New York-based tax preparer known as “the Magician” has pleaded guilty to submitting tens of thousands of inaccurate tax filings, resulting in a $145 million loss in tax revenue for the government.
The U.S. Attorney’s Office for the Southern District of New York issued a statement indicating that Rafael Alvarez’s actions mark one of the most significant cases of tax fraud linked to a return preparer.
According to prosecutors, Alvarez’s scheme involved false data aimed at unlawfully lowering individuals’ taxes.
“Rafael Alvarez earned the nickname ‘the Magician’ from his clients due to his alleged talent for making their tax obligations vanish. However, his guilty plea today demonstrates that there was nothing magical about his actions,” stated Acting U.S. Attorney Edward Y. Kim.
Officials say Alvarez has accepted guilty pleas for one count of conspiracy to defraud the U.S. government and for one count of helping prepare a false tax return.
These charges could lead to a maximum sentence of five years for conspiracy and three years for the false return charge.
A decade with ‘the Magician’
According to prosecutors, Alvarez was the owner of ATAX New York in the Bronx, described as a “high-volume tax preparation business.” Between 2010 and 2020, the company filed around 90,000 federal income tax returns.
The fraudulent information submitted to the government included fake itemized deductions, fabricated capital losses, invented business expenses, and false tax credits, prosecutors stated.
“Alvarez was remarkably consistent in falsifying tax returns for ATAX clients, earning him the nickname ‘the Magician’ among them,” the release explained. “His operation helped ATAX accumulate about $12 million in illicit proceeds throughout the fraudulent activity.”
As part of his plea deal, Alvarez has agreed to refund $145 million to the IRS and surrender over $11 million in fraudulent income.
His sentencing is set for April of the following year.
Alvarez’s lawyer, Michael Bachrach, declined to comment when contacted by YSL News.
