Tracey Hernandez sentenced to 25 months in prison and ordered to pay $2,106,281 in restitution after operating as a ghost preparer who filed over 200 fraudulent returns claiming fabricated education credits and COVID sick-leave credits.

Tracey Hernandez — Ghost Preparer, Fraudulent Education Credits (2021–2022)

Outcome: Hernandez sentenced to 25 months in federal prison, one year supervised release, and $2,106,281 restitution to the IRS.

Tracey Hernandez operated a tax preparation business in Burlington, North Carolina and over tax years 2021 and 2022 prepared and filed more than 200 fraudulent individual income tax returns for clients without signing them as the paid preparer—a practice known as "ghost preparing." The returns falsely claimed fraudulent education expenses and refundable education credits, as well as fraudulent Schedule C business losses and credits for sick and family leave for allegedly self-employed individuals. The total tax loss caused was $2,106,281.

Hernandez pleaded guilty on September 5, 2025 to one count of aiding and assisting in the filing of a false tax return. Sentencing occurred on March 17, 2026 before U.S. District Judge Richard E. Myers II in the Middle District of North Carolina. The case was prosecuted by Assistant U.S. Attorney Ashley Waid and investigated by IRS Criminal Investigation.

Ghost preparers deliberately omit their identifying information from returns to evade IRS scrutiny. By leaving returns unsigned, Hernandez shielded herself from the pattern-detection systems the IRS applies to paid preparers, while her clients were exposed to audit liability and potential repayment obligations for the fraudulently claimed refunds.

Primary Source: Burlington Tax Return Preparer Sentenced in Connection with Million-Dollar Tax Refund Scheme