Tax Preparer Sentenced to 3 Years in $6.7 Million Tax Fraud

A Waxahachie tax preparer was sentenced Thursday to three years in prison and ordered to pay more than $6.7 million in restitution to the IRS, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.

Bachary Rushid McGruder, the 45-year-old owner of M&M Enterprises and Consulting, TX, was indicted in November 2021 and pleaded guilty in November 2023 to aiding and assisting in the preparation of false tax returns. He was sentenced Thursday by U.S. District Judge Barbara M.G. Lynn.

During tax years 2015 through 2018, Mr. McGruder knowingly prepared more than 1,000 fraudulent tax returns for his clients, including fictitious Schedule A itemized deductions like gifts to charity, unreimbursed employee expenses (UEBE), and home mortgage interest; false Schedule C business losses; and false Residential Energy Credits (REC).

He included the false statements on clients' tax returns without their knowledge, and had clients sign forms justifying the deductions and credits without explaining the forms' contents to clients.

Mr. McGruder made his profits from the false tax returns by charging unusually exorbitant fees which were deducted from the individual tax refunds, charging clients as much as $2,800 for preparing their returns.

The fraud resulted in a tax loss of $6.73 million.

IRS - Criminal Investigation conducted the investigation. Assistant U.S. Attorney Josh Detzky prosecuted the case.