Tax Topics

BATON ROUGE – Recent actions by the US Congress regarding the fiscal cliff legislation, known as the American Taxpayer Relief Act (ATRA), delayed the date when Internal Revenue Service (IRS) tax returns may be filed. Today, January 30, is the first day when federal income returns will be accepted. The Louisiana Department of Revenue (LDR) will also begin to receive income tax returns today.

The majority of IRS tax returns are now filed electronically. In 2012, 80 percent of all federal tax returns were filed electronically, fulfilling a goal Congress set in 1998. Since 2007, the number of Louisiana taxpayers filing their taxes electronically has risen by 58 percent. In 2011, 1.6 million Louisiana taxpayers (82 percent of the total number of Louisiana taxpayers) e-filed filed their state income tax return.

With the increase in electronic filing, tax fraud has skyrocketed. At the federal level, tax fraud remains the third largest theft of federal funds (just behind Medicare/Medicaid and unemployment insurance fraud) and has risen to a record 1.1 million cases in 2011. With the rise in electronic filing of Louisiana state income tax returns, state tax fraud has also increased. Tax fraud cases in Louisiana directly discovered as a result of current theft protection measures have risen to almost 23,000 cases in 2012.

LDR has taken steps to prevent e-filing fraud in coordination with the IRS. When current Executive Counsel, Tim Barfield and Chief of Staff Jarrod Coniglio first arrived at the agency late in 2012, a priority was placed on protecting the public from tax fraud with the installation and integration of new fraud protection software.

“When I first saw the data and the growing possibility for millions of dollars to be stolen from the state of Louisiana, we wanted to put in measures that would immediately maximize LDR’s efficiency to prevent tax fraud,” Barfield said.

LDR worked during December 2012/January 2013 to develop a customized Louisiana-specific fraud protection computer interface. The new system required a significant testing phase to assure accuracy of the system, protect taxpayer identity, and secure all confidential taxpayer information.

All state income tax returns received on or after January 30, 2013, will be subject to identity verification through the new tax protection software. The first taxpayer returns will be processed February 15, 2013. Refunds will begin to be issued on February 26, 2013.

If a return is identified as questionable in the review process, the taxpayer will then be directed to a customized online data test or a telephone survey that will serve as a secure method to verify the identity and final certification of the return.

“We are confident this new system will help protect the public trust against tax fraud,” Barfield stated. “Our goal is to increase the efficiency and effectiveness of this agency as we serve Louisiana taxpayers during the tax season.”

BATON ROUGE – A Slidell business owner faces hundreds of felony charges for filing fraudulent tax returns and issuing worthless checks.

Source: East Baton Rouge Parish Sheriff's Office

Investigators with the Louisiana Attorney General’s Office arrested John Labee  as the result of a joint investigation between fraud investigators at the Louisiana Department of Revenue and the Attorney General’s Office.

“This arrest is a great example of Louisiana agencies working together to crack down on tax fraud,” said Secretary of Revenue Cynthia Bridges.

Attorney General Buddy Caldwell said, “This sends a clear message that fraud will not be tolerated in Louisiana.”

Investigators say Labee, owner of Innovative Professional Financial Services, submitted more than 500 fraudulent Louisiana Individual Income Tax returns on behalf of clients for tax periods in 2008 and 2009.  They say the returns contained incorrectly reported deductions, fabricated withholding statements and overstated withholdings. 

In addition, Labee faces charges of submitting fraudulent returns for himself for tax periods from 2007 to 2009.

The arrest warrant also accuses Labee of writing worthless checks to the Department of Revenue to pay taxes his clients owed to the state.

The charges against Labee include:

• 530 counts of filing or maintaining false public records
• 53 counts of issuing worthless checks

BATON ROUGE – An Alexandria man faces four felony counts of tax fraud following a joint investigation by the Louisiana Department of Revenue (LDR), the Louisiana Attorney General’s office, and the Rapides Parish Sales and Use Tax Department.

Special agents from the Louisiana Department of Justice arrested Rajeshkuner Patel, of 5846 Navaho Trail, Alexandria, on Wednesday, December 9.  The arrest warrant was the result of a year-long investigation of alleged criminal tax violations at one of Patel’s businesses, NR Group, L.L.C.

The charges against Patel are:

• Theft over $500.00 [La R.S. 14:67(B)(1)] – Two Counts
• Failure to Account for State Tax Money [La. R.S. 47:1641] – One Count
• Tax Evasion [La. R.S. 47:1642] – One Count

June 4, 2009

BATON ROUGE ‐ A Baton Rouge woman faces a charge related to felony tax fraud after she allegedly committed identity theft in the filing of fraudulent state income tax returns.

Baton Rouge police arrested 25‐year‐old Kathryn Foster, of 1358 North 23rd Street in Baton Rouge, on one count of Filing False Public Records. The arrest was the result of a joint investigation by the Criminal Investigations Division (CID) of the Louisiana Department of Revenue, the East Baton Rouge Parish District Attorneyʹs Office, and Baton Rouge City Police.

Investigators say Foster falsely claimed two individuals as dependents on her Louisiana State Individual Income Tax returns in 2006, 2007, and 2008.

If convicted, Foster faces up to five years in prison, a fine of up to $5,000, or both.
For more information, please contact:

Barry Kelly
Director, Criminal Investigations Division
Louisiana Department of Revenue
225.219.2280
Barry.kelly@la.gov