The Internal Revenue Service is investigating a Brooklyn Park accounting firm and its general partner on suspicion of tax evasion and assisting in the filing of false or fraudulent tax returns.
IRS criminal investigators said in recently unsealed federal court documents that Julius Nyamweya Kiage claims to be a certified public accountant (CPA) and has been doing business since at least 2003 under the name J.K. Accounting & Co. PLLC. But they said Kiage, 46, of Coon Rapids, is not listed as a CPA in any of the states in which he has lived, including Minnesota, Wisconsin and Iowa.
In a sworn statement filed to obtain a search warrant last month, IRS special agent Paul Nelson said that returns filed by Kiage's firm appear to contain a pattern of exaggerated or fraudulent claims related to education credits, individual retirement account deductions, education credits and charitable contributions.
Kiage, who has not been charged, declined to comment Thursday. He referred a reporter to his lawyer, Robert Speeter, who could not be reached. The IRS did not respond to a request for comment.
IRS researchers found that J.K. Accounting prepared 1,843 returns for the 2006 and 2007 tax years, which resulted in tax refunds totaling $4.7 million. Investigators raided the firm's office Aug. 14 and seized computer data and equipment, plus 27 boxes of paperwork.
Nelson told a judge they were seeking information about Kiage, J.K. Accounting and 85th Investments Corp. He said Kiage has an interest in 85th Investments, which uses the same address as J.K. Accounting, but it's uncertain what 85th Investments does.
The investigation began based on a tip from an informant who had prepared a tax return for a client showing a tax refund of $304. The client then asked Kiage to redo the return, and it showed a refund of $1,646, Nelson wrote.
The informant said the return Kiage prepared included a $2,000 individual retirement account deduction and a $1,650 education credit for which the client did not qualify.
The IRS said its research found that an "uncommonly high" percentage of returns prepared by Kiage claimed a refund, especially given the income of the clients he served.
The IRS said Kiage prepared a return for an undercover agent that showed a refund of $1,875 when it should have produced a return showing she owed a small amount.
Investigators say Kiage claimed a tax credit on his own 2004-2007 tax returns that is targeted for taxpayers with low to moderate incomes. Yet his returns included "a large amount of itemized deductions" indicating a greater income.
As an example, Nelson wrote, Kiage's 2006 tax return indicates that he paid $15,286 more in mortgage interest than his total adjusted gross income of $3,847.
Dan Browning • 612-673-4493
