Appeals Court Refuses to Overturn Tax Fraud Conviction

Post Date: 4/29/19
Last Updated: 4/29/19


Cross References
Steele, 11th Circuit Court of Appeals, April 17, 2019

A district court jury convicted Donald Steele of five counts of assisting in the preparation of fraudulent tax returns and one count of witness tampering. Steele appealed the ruling claiming that the district court erred by not permitting the defense to call IRS agent David Tucker to the stand to contradict testimony given by one of Steele's co-workers, Daphne Stewart, who had testified that Steele had the opportunity to commit tax fraud. The defense focused on exploiting the fact that Steele was not listed as the preparer on any of the fraudulent tax returns, he lacked the technical know-how to file fraudulent returns, it was others at the tax preparation firm, including his wife who had committed the tax fraud, and that he mainly was only responsible for greeting customers.

The appeals court stated that excluding the impeachment evidence would not have changed the outcome because there was an overwhelming amount of other evidence showing that Steele was in fact guilty of committing tax fraud.

During the district court trial, the IRS presented testimony from three types of witnesses:
1) Customers of the tax preparation firm who testified that they had turned over their financial information to Steele and that he had told them their returns had been filed, some who also testified that Steele later tried to persuade them to tell the IRS that somebody else had prepared their tax returns,
2) A tax preparation firm employee named Daphne Stewart, and
3) Investigating agents from the IRS.

The jury returned a guilty verdict on Counts 3 through 7, assisting in the preparation and presentation of fraudulent tax returns, and Count 9, witness tampering.

Counts 3 and 4 arose from Alisa Tate's tax returns which improperly claimed business losses. Tate testified that she gave her financials to Steele and did not interact with any other employee from the tax preparation firm. Her returns claimed deductions to which she was not entitled. For example, a deduction for expenses and losses from a non-existent home-furnishings business. Tate testified this information was false and she had no idea where Steele got it from.

On cross-examination, Tate stated that although she did not physically watch Steele prepare her tax returns, she assumed he prepared her returns since he was the only person she spoke with at the tax preparation firm. Her returns listed others as the preparers, but she testified that she had never met them before.

Counts 5 and 6 arose from Jeannet Washington's tax returns. She gave Steele her financial information and waited at the tax preparation firm while her taxes were being prepared. She testified that Steele told her that he had finished her returns and showed her the amount she could expect in the form of a refund.

Washington testified that her returns listed improper medical and dental expenses, charitable contributions, and educational expenses for her son. She was also incorrectly listed as the head of household. Her tax returns listed others as the preparers, but Washington said she never worked with those individuals.

Counts 7 and 9 centered on Katrina Taylor, who also testified her tax returns were falsified without telling her. She said she waited while Steele prepared her tax return, and he called her back to sign it after he had completed it. Taylor's return included improper deductions for expenses relating to education, and it listed the wrong place of employment. Taylor testified that another person was identified as the preparer of her return, but she had never met her.

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