Rocky Mount Tax Preparer Admits to $3.9M Fraud Scheme
The guilty plea impacts former clients who may need to verify their past tax return filings.
Updated on Oct. 28, 2026 in Taxes
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Rocky Mount tax preparer Chowan Watson has pleaded guilty to submitting false returns, a scheme that resulted in $3.9 million in federal tax losses. The operation, conducted through the now-defunct K&J Tax Service, involved falsifying taxpayer refund information.
Why it matters
This case highlights the importance of vetting tax professionals, as fraudulent filings can lead to severe personal legal and financial liability for taxpayers. The scheme involved inflating 1099 withholding amounts to secure larger refunds, from which the preparers deducted excessive fees.
The fraudulent scheme resulted in $3.9 million in total tax losses through the filing of hundreds of returns over a six-year period. Watson faces a maximum penalty of 36 months in federal prison for his role in the operation.
The players
Chowan Watson
A tax preparer who pleaded guilty to aiding and assisting in the preparation of a false tax return.
Angela Dickens
A co-operator of the tax service who previously pleaded guilty for her role in the scheme.
IRS
The federal agency responsible for tax collection and enforcement to which Watson has agreed to pay restitution.
The details
Watson and his partner, Angela Dickens, managed a tax service that systematically inflated Other 1099 Withholding amounts on client returns to trigger higher-than-deserved refunds. By manipulating these figures, they generated larger payouts and then collected excessive fees from the resulting refunds. Taxpayers are responsible for the accuracy of returns filed on their behalf, even when using professional services.
Timeline
The tax fraud scheme operated between 2017 and 2023.
Watson is scheduled to be sentenced in 2026.
Money Landscape
This case sits within ongoing federal efforts to curb tax return fraud that exploits systemic refund processes. It highlights the recurring challenge of ensuring compliance among commercial tax preparation services.
If you used a tax preparer during the 2017-2023 period, verify your own filings to ensure the income and withholding amounts are accurate. Consult a qualified tax professional if you suspect your past returns were modified without your authorization.
The takeaway
Taxpayers remain legally liable for the contents of their returns regardless of who prepares them. Consider requesting a copy of your IRS account transcript to verify that the amounts reported on your past returns match your actual income and tax records.
Further reading
For guidance on selecting a professional, review the resources in our Taxes section.
More information
You can view the specific filings for case 5:26-CR-125-M through the U.S. District Court case documents portal.
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