East Falls Tax Preparer Guilty of Fraud

A Philadelphia man was convicted of 63 counts of fraud by a federal jury this week and faces a possible sentence of 33 to 41 months in prison and a fine up to $21 million.

The jury at the U.S. District Court for the Eastern District of Philadelphia found David Nixon, 50, of Philadelphia, guilty of preparing false income tax returns out of his office on Stanton Street in the East Falls section of the city, just outside Manayunk. A sentencing hearing is scheduled for July 7.

As the owner of Economy Tax Services, Nixon filled out fraudulent income tax returns for his clients for tax years 2007 through 2009, the Department of Justice said.

The fraudulent returns included credits for children, earned income credit, tuition and fees, residential energy efficiency credits, incorrect filing status, and false or falsely inflated deductions for charitable contributions and employee business expenses.

More than 25 of the taxpayers testified during at trial that Nixon changed their filing status from married to head of household, inflated their charitable contributions, and/or created employee business expenses.

The jury also heard a recorded meeting between Nixon and an undercover IRS agent during which Nixon said, “I cheated to get them [other taxpayers] two, three thousand,” “I had a 99.9 percent record of people who’ve got refunds,” and “my rule of thumb, let me get you some money before I get mine.”

By preparing and filing the altered tax returns, Nixon and his clients received a larger refund, defrauding the IRS of more than $200,000.