MEMPHIS, TN – October 14, 2026 (STL.News) A Tennessee tax preparer has pleaded guilty to federal tax crimes after preparing fraudulent income tax returns for clients and failing to file her own required tax returns, resulting in $4.1 million in losses to the Internal Revenue Service, according to the U.S. Department of Justice.
Lynette Hogue, 45, of Memphis, admitted to preparing and filing false federal income tax returns that generated refunds her clients were not legally entitled to receive. Federal prosecutors said Hogue also earned substantial income from tax preparation activities but deliberately failed to file her own income tax returns.
The guilty plea marks another significant federal tax fraud prosecution as the Justice Department expands nationwide enforcement against fraudulent tax preparers, businesses and individuals accused of improperly obtaining government funds.
Hogue is scheduled to be sentenced on January 15, 2027, and faces a combined statutory maximum of four years in federal prison. The Justice Department also announced that she must repay $4.1 million associated with her fraudulent conduct.
How the $4.1 Million Tax Fraud Scheme Worked
According to federal prosecutors, Hogue worked at a tax preparation business where she prepared and submitted federal income tax returns on behalf of clients.
Instead of accurately reporting the information needed to calculate legitimate tax liabilities and refunds, she included false and fraudulent information on returns submitted to the IRS.
Those misrepresentations generated refunds to which taxpayers were not legally entitled.
The Justice Department has not publicly identified the tax preparation business in its national announcement or specified how many individual returns were involved.
Prosecutors also did not provide a detailed breakdown of the fraudulent entries, the number of affected taxpayers, or the tax years associated with every improper filing.
However, the admitted conduct shows how a tax preparation business can become a vehicle for substantial financial losses when it repeatedly submits false information to federal tax authorities.
Tax preparers play an important role in the federal tax system because millions of Americans rely on them to interpret tax rules, calculate liabilities, and prepare accurate returns.
When a preparer knowingly submits false information, the consequences can extend beyond the government’s immediate financial loss.
Taxpayers may face audits, refund adjustments, repayment demands, and other complications if their returns contain inaccurate information, even when a third party prepared the documents.
The DOJ announcement does not establish whether Hogue’s individual clients knew that their returns contained fraudulent information.
That distinction is important because a preparer’s criminal conduct does not automatically establish wrongdoing by every taxpayer whose return was involved.
Tax Preparer Also Failed to File Her Own Returns
Federal prosecutors said Hogue’s misconduct extended beyond preparing fraudulent returns for clients.
Despite earning substantial income from tax preparation activities, she willfully failed to file her own federal income tax returns when required by law.
The failure-to-file charge is a separate criminal offense from preparing false returns for other taxpayers.
Under federal tax law, taxpayers who meet applicable filing requirements must submit accurate returns reporting their income and other relevant financial information.
A willful failure to file involves a voluntary, intentional violation of a known legal duty rather than simply making a mistake or overlooking a filing deadline.
Hogue admitted to one count of willfully aiding and assisting in the preparation and filing of a false tax return and one count of willfully failing to file an individual income tax return.
Her guilty plea establishes criminal responsibility for those offenses, although the court has not yet imposed a sentence.
The Justice Department has not disclosed Hogue’s total personal income, the number of years she failed to file returns or the amount of unpaid taxes attributable specifically to her individual filing violations.
Hogue Faces Federal Prison Sentence
Hogue’s sentencing is scheduled for January 15, 2027, in federal district court.
The false-return offense carries a maximum prison sentence of three years, while the willful failure-to-file offense carries a maximum of one year.
Together, the offenses expose Hogue to a potential four-year prison sentence, although that does not mean she will necessarily receive the maximum punishment.
A federal judge will determine the appropriate sentence after considering the U.S. Sentencing Guidelines and applicable statutory factors.
Those considerations can include the seriousness of the offenses, the defendant’s criminal history, the circumstances surrounding the conduct and the need to deter future criminal activity.
Federal sentencing guidelines are advisory, meaning judges must consider them but are not automatically required to impose a sentence within the recommended range.
The financial consequences may also be substantial.
The Justice Department’s announcement states that Hogue must repay $4.1 million for her tax fraud.
The precise terms of any restitution order and additional financial penalties will depend on the applicable court proceedings.
Part of a Nationwide Tax Fraud Enforcement Effort
Hogue’s guilty plea comes as the Justice Department announces a broader national initiative targeting fraudulent tax returns and related financial crimes.
On October 14, federal officials announced that the department’s National Fraud Enforcement Division, the IRS, and IRS Criminal Investigation had participated in a coordinated National Tax Enforcement Surge.
The enforcement initiative involved 35 U.S. attorneys’ offices and led to prosecutorial actions against 76 defendants.
According to the Justice Department, the alleged and proven offenses collectively involved more than $490 million in estimated intended federal revenue losses.
That figure reflects the broader enforcement initiative, not the money lost in Hogue’s individual case.
The department reported 23 new charging actions involving 31 defendants and approximately 39 additional enforcement actions, including guilty pleas, trials and sentencings, affecting another 45 defendants.
The nationwide operation highlights the federal government’s increased attention to tax-related fraud, including false refund claims, fraudulent business credits and misconduct involving professional tax return preparers.
The Western District of Tennessee participated in the initiative, with prosecutors announcing several cases involving fraudulent tax filings.
Other Tennessee Tax Fraud Cases Highlight Enforcement
In a separate Memphis case, federal prosecutors announced that Rebecca Gilley, 41, was sentenced on October 8, 2026, to 30 months in federal prison for filing false tax returns on behalf of clients.
According to the U.S. Attorney’s Office for the Western District of Tennessee, Gilley ran a tax preparation business and filed returns with fraudulent education credits and sick and family leave credits.
Prosecutors said she filed more than 1,000 returns for the 2020 and 2021 tax years seeking over $9.25 million in fraudulent sick and family leave credits.
The government reported that her conduct caused more than $350,000 in actual losses. The court ordered her to pay $289,908 in restitution and permanently prohibited her from operating as a tax return preparer.
In another Tennessee case, Frank Jason Cole, 49, of Memphis, pleaded guilty on September 14, 2026, to wire fraud involving false business tax returns.
Federal prosecutors said Cole submitted fraudulent claims involving the Employee Retention Credit, a federal tax credit established to assist eligible employers during the COVID-19 pandemic.
According to the Justice Department, Cole prepared and filed false business returns for 52 individuals, requesting more than $24 million in fraudulent refunds, with more than $19 million paid out.
Cole is scheduled to be sentenced on January 21, 2027.
The cases are separate prosecutions, and federal authorities have not identified a connection between the defendants.
Together, however, they show the range of tax fraud schemes federal investigators in Tennessee are pursuing.
IRS Criminal Investigation Examines Fraudulent Returns
IRS Criminal Investigation is responsible for investigating Hogue’s case.
The agency investigates potential criminal violations involving federal tax laws and other financial crimes.
Unlike routine civil tax examinations, criminal tax investigations focus on conduct that may justify federal prosecution.
Investigators may analyze tax return filings, financial records, business transactions, and other evidence to determine whether they knowingly submitted false statements or improper refund claims.
Tax return preparer investigations can be particularly important because a single individual may prepare numerous returns containing similar fraudulent entries.
Patterns across multiple filings can help investigators identify suspicious activity and determine whether irregularities reflect isolated mistakes or deliberate misconduct.
In Hogue’s case, the Justice Department has not disclosed the investigative techniques used or the specific evidence that led to her guilty plea.
Trial Attorneys Isaiah Boyd III and Matthew C. Hicks of the Justice Department’s Fraud Division Tax Section, along with Assistant U.S. Attorney Carroll L. André III for the Western District of Tennessee, are handling the prosecution.
Assistant Attorney General Colin McDonald and U.S. Attorney D. Michael Dunavant announced the case.
Why Fraudulent Tax Preparation Matters to Taxpayers
Fraudulent tax preparation can create significant problems for taxpayers who rely on professionals to handle their federal income tax filings.
A tax preparer may promise unusually large refunds, suggest deductions that cannot be documented, or claim credits for which a taxpayer does not qualify.
Those practices can produce immediate financial benefits but may also expose taxpayers to future repayment obligations and enforcement actions.
The IRS generally holds taxpayers responsible for the accuracy of returns filed under their names, even when they hire professional preparers.
However, the circumstances surrounding an inaccurate return matter, including whether the taxpayer knew about the false information or was misled by the preparer.
Taxpayers can reduce their exposure by carefully reviewing completed returns, confirming that income and deductions are accurate, and requesting copies of all documents submitted to the IRS.
They should also be cautious of preparers who guarantee large refunds before reviewing financial information or refuse to explain how they calculated a refund.
The Hogue prosecution shows why federal authorities treat fraudulent return preparation as a serious financial crime.
A single preparer’s misconduct can affect numerous filings and cause losses reaching millions of dollars.
Federal Government Expands Fraud Prosecutions
The Justice Department established its National Fraud Enforcement Division in April 2026 as part of a broader initiative to investigate and prosecute fraud against the federal government and American taxpayers.
The division investigates and prosecutes tax fraud cases involving individuals and businesses accused of obtaining federal funds through dishonest practices.
Federal officials have emphasized that tax fraud enforcement aims to recover government losses and deter similar conduct.
The October enforcement surge illustrates the scale of the government’s current effort, although the cases included in the initiative involve different defendants, legal allegations, and procedural outcomes.
Some defendants have been convicted or pleaded guilty, while others face charges that remain allegations until established in court.
In Hogue’s case, the criminal proceedings have moved beyond the allegation stage because she pleaded guilty.
The remaining major step is sentencing.
Her case also illustrates the financial exposure that can accompany fraudulent refund schemes. The $4.1 million loss attributed to her conduct is substantially greater than the maximum four-year prison term alone might suggest.
Federal prosecutors can pursue both criminal punishment and financial recovery when the law permits.
Sentencing Scheduled for January 2027
Hogue is expected to return to federal court January 15, 2027, when a judge will determine her sentence.
The court will consider the applicable sentencing guidelines, the nature of her offenses, and other relevant factors before deciding whether to impose imprisonment and other penalties.
The Justice Department has not announced a final prison sentence.
For federal investigators, the prosecution represents another completed guilty plea in a wider campaign against fraudulent tax preparation and improper refund claims.
For taxpayers, the case reinforces the importance of ensuring that income tax returns are accurate, properly documented, and reviewed before submission.
The federal government continues to pursue tax preparers who knowingly submit false returns, particularly when the conduct results in substantial losses to public revenue.
Hogue’s admitted misconduct resulted in $4.1 million in IRS losses and leaves her facing the possibility of federal imprisonment, financial repayment obligations, and the lasting consequences of a federal criminal conviction.
