Detroit Tax Preparer Pleads Guilty to $7M IRS Fraud Scheme

Rodney Underwood of Detroit filed over 200 false tax returns, fraudulently claiming $7M in refunds. He faces up to five years in prison.

Detroit Man Admits to Filing 200+ Fake Tax Returns, Costing Government $6.2M

A Detroit man has pleaded guilty to a $7 million tax fraud scheme involving more than 200 falsified returns filed on behalf of clients, DOJ Justice News reports.

Rodney Underwood prepared and submitted fraudulent federal tax returns listing fabricated dividend income and inflated withholding amounts, generating refunds his clients were not entitled to receive. The false filings caused an actual loss to the government of approximately $6.2 million.

Underwood operated as a so-called "ghost preparer" — leaving the paid preparer section blank on each return to make them appear self-prepared. Clients came from various locations across Detroit. Underwood also failed to report the fees he collected from the scheme on his own individual tax returns.

"Filing false returns isn't a shortcut — it's pure theft," said Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division. "Fraudulent refunds steal millions from Americans who play by the rules, and we will pursue those who willfully cheat the tax system without fear or favor."

Underwood pleaded guilty to making a false claim. Sentencing is scheduled for January 6, 2027, and he faces a maximum penalty of five years in prison. A federal district court judge will determine the final sentence after weighing the U.S. Sentencing Guidelines and other statutory factors.

IRS Criminal Investigation is handling the investigation. Trial Attorneys Shawn Noud and Alexis Hughes of the National Fraud Enforcement Division's Tax Section are prosecuting the case.

Source: DOJ Justice News