A Santa Clarita Valley tax preparer, Jordan Aldric Jordan, pleaded guilty to filing false tax returns and fraudulently obtaining COVID-19 benefits, resulting in over $25 million in losses to the U.S. Treasury.
This case highlights a troubling trend of fraud during a time when many Americans relied on assistance due to the pandemic. The COVID-19 disaster relief programs were designed to help those in need, but they also attracted individuals looking to exploit the system for personal gain.
Jordan’s actions involved filing more than 1,370 federal tax returns that reported total business losses exceeding $73 million. This raises a critical question: how do such fraudulent claims affect legitimate taxpayers? The answer lies in the financial strain placed on government resources and the potential for increased scrutiny on all taxpayers.
To illustrate the scale of this issue, consider these key statistics:
- Jordan received a total of $188,667 in Paycheck Protection Program (PPP) loans.
- He also obtained $276,600 in Economic Injury Disaster Loans (EIDL).
- The fraudulent activities contributed significantly to the estimated tens of millions of taxpayers who may be entitled to refunds or abatements of penalties and interest due to COVID-19 disaster relief.
The IRS has mechanisms in place for addressing fraudulent claims. For instance, taxpayers can obtain IRS tax account transcripts online or by mail, which can help clarify their standing with the agency. Additionally, a protective claim allows taxpayers to preserve their right to a refund while legal issues are resolved — a crucial step that many may not fully understand.
As noted by a National Taxpayer Advocate, “Many taxpayers affected by this issue have low and moderate incomes.” This sentiment underscores the importance of ensuring that legitimate claims are processed efficiently while preventing fraud. Yet, many taxpayers may not even realize they are affected by the disaster relief.
Looking ahead, it remains uncertain how many more cases like Jordan’s will emerge as authorities continue their investigations into fraudulent claims made during this unprecedented time. The deadline for filing claims for refunds related to COVID-19 disaster relief is set for July 10, 2026 — an important date for those who might be eligible.