Rocky Mount Tax Preparer Pleads Guilty In $3.9 Million Tax Fraud Scheme

RALEIGH – A Rocky Mount tax preparer has pleaded guilty in federal court for her role in a scheme prosecutors say caused approximately $3.9 million in tax losses.

Chowan Watson, 55, pleaded guilty to one count of aiding and assisting in the preparation of a false tax return.

Watson faces up to three years in federal prison when she is sentenced later this year. She has also agreed to pay restitution to the Internal Revenue Service.

According to federal prosecutors, Watson and Angela Dickens operated Empire Tax Service, later renamed K&J Tax Service, in Rocky Mount.

From 2017 through 2023, prosecutors said the two women filed hundreds of fraudulent tax returns by inflating amounts listed as “Other 1099 Withholding.”

The false withholding amounts increased tax refunds, allowing Watson and Dickens to collect excessive preparation fees from the refunds, according to the U.S. Attorney’s Office.

Federal authorities estimate the total tax loss at approximately $3.9 million.

Dickens previously pleaded guilty in connection with the same scheme.

U.S. Attorney Ellis Boyle said the case involved years of fraudulent returns that improperly increased refunds paid from the U.S. Treasury.

“Watson and Dickens didn’t just bend the rules—they broke the door wide open,” Boyle said. “For years, they engineered a scheme that faked withholdings, pumped up refunds, and drained the U.S. Treasury of nearly four million dollars.”

IRS Criminal Investigation conducted the investigation.

Chief U.S. District Judge Richard E. Myers II accepted Watson’s guilty plea.