Chicago Tax Preparer Pleads Guilty to Filing Fake Returns

If you think your tax refund is “too good to be true,” you might be riding a shotgun in a scam without even knowing it. Just ask the 1,000+ clients of Chicago-area tax preparer Aida Villanueva, whose operation looked legit, but under the hood, it was messier than a shoebox full of receipts during audit season. Villanueva, owner of Ultimate Tax Services, pleaded guilty to preparing hundreds of phony tax returns between 2018 and 2021. The total damage? A whopping $902,000 in tax losses to Uncle Sam. And while the IRS is just beginning to sort through the wreckage, this case is just the latest in a string of “trusted pros” flipping the script for personal gain.

Stackin’ Refunds Like Pancakes

Villanueva wasn’t a small-time schemer. With over 15 years in the business and more than 1,000 clients served, she had street cred in the Chicago tax scene. But beneath the smiling service and glossy office branding was a playbook full of fraud:

• Fabricated Schedule C business losses to lower taxable income
• Inflated medical expenses and charitable deductions
• Claimed fake dependents to unlock bigger refunds
• Misused education credits and EITC claims
• Even had refunds routed to her accounts in some cases

These weren’t oopsie-daisies. They were cold, calculated moves, designed to dazzle clients with big refund checks while she quietly boosted her own prep fees. Sounds familiar? It should. In another recent case, Byron Taylor, owner of “We Are Taxes” in Dolton, Illinois, pulled the same stunt, filing 54 fake returns and even using PPP loans for personal gambling binges. He, too, faces up to three years in prison and restitution for nearly $915,000 in IRS losses.

The IRS Finally Hits Back

The IRS Criminal Investigation team flagged Villanueva’s filings after a suspicious pattern of too-good-to-be-true returns started stacking up. From there, it was over. She was charged in the Northern District of Illinois and now awaits sentencing. She faces up to three years in prison, restitution, and monetary penalties. But the worst part? Hundreds of her clients may now be facing audits, repayment demands, or IRS scrutiny, despite having no idea their returns were falsified. This case doesn’t just expose one rogue preparer. It highlights how a few unchecked loopholes can put thousands of taxpayers in danger.

It’s Time to Step Up

Here's the kicker: Villanueva wasn’t a CPA. Like many return preparers, she operated in the regulatory gray zone. The IRS estimates that over 50% of U.S. tax returns are filed by someone other than the taxpayer, but not all of them are licensed or credentialed professionals. So, what can be done? Plenty:

For regulators:

• Mandate registration and ethics training for all preparers—credentialed or not
• Expand the use of PTINs and trigger more audit reviews for high-refund claims
• Use AI and pattern recognition to detect suspect deductions and duplicative filings

For professionals:

• Be transparent with clients about what’s legal and what’s shady
• Flag and report shady filings using IRS Form 14157
• Do a “lookback review” on new client returns from previous years to catch fraud early

For taxpayers: 

• If your tax refund feels like it belongs in a rap video, ask questions. Review every line of your return. If you’re being rushed to sign, that’s a red flag.

The Bottom Line

What Villanueva and Taylor’s cases show us is simple: fraud scales fast when no one’s watching. The IRS can’t catch every scammer. That’s why ethical preparers and informed clients must be the first line of defense. Villanueva’s story is more than a criminal case; it’s a gut check for the tax profession. And with the 2025 filing season right around the corner, now’s the time to reinforce trust, tighten processes, and rebuild credibility in the eyes of the public. Because when your tax pro turns rogue, it’s not just the IRS that gets burned. It’s your wallet, your peace of mind, and your faith in the system. Follow MYCPE ONE Insights on LinkedIn and subscribe to our newsletter for the latest financial news, fraud alerts, and expert tax commentary, delivered with bite.