An Augusta woman, Kim Brown, 40, has pleaded guilty to operating a "ghost" tax preparation business from her residence. She faces a potential sentence of up to three years in prison for each of two counts of aiding and assisting in the preparation and filing of false tax returns. This will be followed by a period of supervised release and monetary penalties.

According to a plea agreement submitted to the U.S. District Court for the Southern District of Georgia on Tuesday, Brown did not adhere to IRS regulations. Specifically, she failed to identify herself as a paid preparer on the tax returns she submitted for her clients.

Furthermore, Brown admitted to fabricating income to enable her clients to qualify for various tax credits and claiming fraudulent deductions to inflate the size of their refunds. She also charged clients a fee that was a percentage of the refund amount.

In total, Brown prepared 22 false tax returns, which resulted in a loss of $541,912 to the U.S. Treasury Department in fraudulent refunds. The IRS Criminal Investigation Division investigated the case, and Assistant U.S. Attorney George J.C. Jacobs III handled the prosecution.