GREENVILLE, N.C. — A North Carolina tax preparer who prosecutors say turned a small-business tax credit and a low-income refund program into a six-year fraud engine has been sentenced in federal court, closing a case that cost the U.S. Treasury roughly $1.5 million. Danielle Melissa Staten, 40, of Greenville, was sentenced by United States District Judge James C. Dever III to more than two years in federal prison, followed by one year of supervised release, the U.S. Attorney’s Office for the Eastern District of North Carolina announced.
She was also ordered to pay $1,508,171 in restitution to the Internal Revenue Service. Staten owned and operated Precise Tax Preparation, LLC, a tax preparation firm based in Greenville.
According to prosecutors, between 2018 and 2023 she filed false tax returns on behalf of clients, fabricating financial data to artificially inflate their refunds.
How the scheme worked
Court records state that Staten filed false Schedule C forms — the IRS form used to report profits and losses from small businesses — by inventing business income and expenses. Prosecutors said she also manufactured income and expense figures to fraudulently qualify clients for a larger Earned Income Tax Credit, the federal refundable credit designed to assist lower-income workers, particularly those with children. The invented numbers served a single purpose: to move clients into eligibility for a credit meant for people who actually earned the income.
Over the six-year span, prosecutors said, the scheme produced approximately $1.5 million in fraudulent tax losses. Staten pleaded guilty to aiding and assisting in the preparation of a false tax return.
The case was investigated by special agents from IRS Criminal Investigation, the law enforcement arm of the agency.
The enforcement calculus
Tax preparers occupy a sensitive position in the federal revenue system. They sit between the taxpayer and the government, and when one falsifies returns at scale, the loss lands directly on the Treasury while the clients whose names appear on those returns carry the audit exposure. The sentencing brings to a close a prosecution that authorities said exploited a tax credit system meant to help low-income earners.
The Earned Income Tax Credit is a federal program; the Schedule C is an IRS filing requirement for sole proprietors and small businesses. The case reflects ongoing federal efforts to prosecute tax fraud, particularly involving preparers who falsify client returns.
The Eastern District of North Carolina, where the case was handled, is responsible for prosecuting federal crimes across the region. What to watch next is whether the government pursues recovery against any other parties tied to the filings, and how the restitution order is enforced against a defendant now entering federal custody. For now, the ledger closes with a prison term, a year of supervision, and a debt to the IRS set at $1,508,171.
