Feds accuse NYC tax preparer of fraud after 96% of clients get refund: ‘Fabricated and inflated items’

A tax preparer from the Bronx has been charged with submitting numerous fraudulent tax returns after an astonishing 94 to 96 percent of her clients received refunds for six consecutive years.

Kaelima Melendez, aged 48, has been employed at her mother’s tax preparation business, previously known as Tax Hub on Southern Boulevard, since 2010. She charged clients between $80 to $150 for preparing their annual tax returns, as per a complaint filed in Manhattan federal court, which seeks to prevent her from continuing this work.

Online records show that the business has recently been rebranded to Elba’s Tax Service. The Post reported that when they visited the location on Friday, it was found to be closed.

The complaint alleges that Melendez engaged in fraudulent activities to secure substantial refunds for her clients, who were not entitled to them. Although she has yet to be charged with any crime, the lawsuit against her remains a civil matter.

From 2016 to 2021, between 94 to 96% of the returns she prepared yielded a refund.

The allegations state that she created false dependents, fabricated social security numbers, misrepresented household heads, inflated expenses, and even invented entire income streams, allowing her clients to receive tens of thousands of dollars in refund checks.

“For the tax processing years between 2016 and 2021, the overwhelming majority of tax returns prepared by Melendez included requests for refunds,” reads the government’s complaint.

The Internal Revenue Service audited 119 returns that Melendez had prepared between 2014 and 2020, discovering that 111 clients actually owed an average of $4,841 each on their returns.

“By incorporating fabricated and inflated items on her clients’ federal tax returns, Melendez reduced their tax liabilities and often led them to receive refunds that they were not legally entitled to,” the complaint asserts, adding that she may be inclined to repeat her actions and should be “permanently” banned from preparing or filing federal tax returns on behalf of others.

The document also states that Melendez utilized the Electronic Filing Identification Numbers from other accountants since Tax Hub never possessed one.