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Missoula CPA sentenced, fined for filing false tax returns

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Posted at 12:02 PM, Mar 11, 2021

MISSOULA — A Missoula certified public accountant convicted of filing false tax returns for a couple’s businesses has been sentenced to two years in prison to be followed by one year of supervised release and fined $10,000, Acting U.S. Attorney Leif Johnson said.

A jury convicted Daniel Brian Burke, 64, on Nov. 5, 2020, after a four-day trial on six counts of aiding and assisting to subscribing to a false document.

U.S. District Judge Dana L. Christensen presided. Judge Christensen ordered Burke to self-report to prison.

“As with all tax preparers, Mr. Burke had a responsibility to ensure that his clients complied with the tax laws. Instead, Burke actively helped them cheat on their taxes by hiding income, inflating expenses, and manipulating depreciation," Acting U.S. Attorney Johnson said.

"With tax season underway, I hope this case will encourage tax preparers and taxpayers to think twice before committing tax fraud. If they commit fraud, they will be investigated and prosecuted,” he added.

“Today's sentencing of Daniel Burke is a direct result of the excellent partnership the IRS and the U.S. Attorney’s Office have in combating violations of federal law,” said Andy Tsui, Special Agent in Charge IRS Criminal Investigation, Denver Field Office.

“This sentence is a strong message to all CPAs and tax preparers everywhere who are contemplating abusing or exploiting the tax system. IRS CI is committed to investigating and prosecuting those who abuse our tax system.”

In court documents filed in the case and evidence presented at trial, the government alleged that Burke signed false tax returns along with co-defendants and clients, Traci and Joseph Baumgardner, owners of AJB, Inc. and JZ Contracting, Inc., for years 2011 to 2013.

In total, the Baumgardners reported gross receipts of $5,001,374 and paid federal taxes totaling $10,066 for the time. Traci and Joseph Baumgardner each pleaded guilty to a conspiracy count and were sentenced to three years of probation and ordered to pay $89,918 restitution.

The government alleged that through AJB and JZ Contracting, Inc., the Baumgardners operated two businesses, Splash Car Wash, in Missoula and Hamilton, and Pro Sweeps Plus, an industrial maintenance service.

Burke, a certified public accountant, owned and operated Burke and Company, P.C., and prepared corporate and individual tax returns for the Baumgardners.

Prosecutors further alleged an undercover investigation by the IRS showed that Burke instructed the Baumgardners not to deposit cash in the bank or report it as income as required, to deduct personal expenses as business expenses and to improperly depreciate assets.

An undercover IRS agent met with Burke and in a recorded interview, Burke agreed to file false tax returns for the undercover agent. At one point, Burke asked the agent, “You're not an undercover agent from the IRS or anything?” The agent responded no. Burke told the agent how to avoid taxes.