Former Rogersville H&R Block manager pleads guilty to tax fraud

A former manager of a Rogersville H&R Block, a tax preparation business, plead guilty Friday in federal court to failing to pay withheld employment taxes and to filing a false federal income tax return.

Through her plea, Katherine D. Hastings, 58, of Marshfield, admitted that she failed to report more than $138,838 in embezzled income and she failed to pay over $246,334.03 in employee payroll taxes, according to a news release from the Western District of Missouri U.S. Attorney's office.

According to the plea agreement, Hastings was hired in 2004 by Mark Edwards to manage two businesses — Edherg & Hearstein, Inc./Green Square, Inc., operating as H&R Block, and Mason Dixon, Inc. Her duties, according to the release, included overseeing day-to-day operations and paying all accounts payable, including payroll and payroll taxes. Hastings had prepared income tax returns for approximately 35 years and had received tax training from the company.

The release cites court documents stating that, in January 2013, Edwards received notification of delinquent taxes from the Internal Revenue Service and confronted Hastings. Hastings initially told Edwards the delinquency notice was a mistake by the IRS, but later sent an email to Edwards admitting that she did not file the missing reports or pay the taxes, and that she had taken money from him, according to the release. She offered no excuse and apologized to Edwards.

After receiving the email, Edwards fired Hastings and reported the embezzlement and fraud to local law enforcement, according to the release.

Under federal statutes, Hastings is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $10,000 and an order of restitution for willful failure to pay over the employment taxes. The charge of filing a false tax return is punishable by a sentence of up to three years in prison without parole, plus a fine up to $100,000 and an order of restitution.

A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office, according to the release.