Generous Tax Preparer Gets 5 Years’ Probation

Clemencia Carandang was a wheelchair-bound hospital bookkeeper who set up a sideline business a few years ago as an income tax preparer working out of her home in Carson.

It wasn’t a big business--100 or so clients, perhaps, but most of them liked her work, particularly the healthy refunds, and they kept coming back.

There were only two problems.

One was that Carandang had no formal training in income tax work or a state license to do it.

The second was that, according to state investigators, many of the returns she prepared listed outrageously high itemized deductions.

Deductions Made Up

That, said Sam Williams, a special agent for the Franchise Tax Board who investigated Carandang, was because she made up the deductions.

To gain the huge tax refunds, Carandang routinely wrote in thousands of dollars of charitable contributions or interest expenses that her clients never claimed, Williams said.

The people who initially scan tax returns for the state Franchise Tax Board began to notice something funny early last year. Then their computers verified the pattern. A broader investigation subsequently found that Carandang had prepared 500 income tax returns claiming about $800,000 in fraudulent refunds.

The state took the evidence to the Los Angeles County district attorney’s office, which filed 18 felony counts.

5 Years’ Probation

On Friday, two months after pleading guilty to four counts in a compromise with prosecutors, Carandang was sentenced in Compton Superior Court to five years’ probation, ordered to pay a $20,000 fine and another $10,000 to the state for the cost of its investigation. Judge Arthur Jean also ordered her to do 500 hours of community service work.

The 46-year-old divorced woman who lives with her daughter could have received up to 12 years in state prison. However, Deputy Dist. Atty. Reva Goetz said that because Carandang is a paraplegic--the result of a 1971 auto accident--”community service time for her was as much a deterrent as jail.”

Investigator Williams said Carandang specialized in clients who had recently immigrated from the Philippines and charged extremely high fees for tax preparation work--an average of $500 and in one case more than $5,000 in exchange for the promise of huge refunds.