Rocky Mount Tax Preparer Pleads Guilty to Fraud
Chowan Watson admits to a scheme that generated nearly $4 million in losses through false tax filings.
Updated on Oct. 28, 2026 in Taxes
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Chowan Watson has pleaded guilty to aiding in the preparation of false tax returns at a Rocky Mount business. The fraud, which involved inflating 1099 withholding amounts, resulted in an estimated $3.9 million in tax losses.
Why it matters
The case highlights the severity of federal tax fraud and the consequences for preparers who inflate refund amounts for personal gain. Restitution to the IRS is now required as part of the legal resolution.
The fraudulent scheme resulted in $3.9 million in total tax losses over a six-year period. Watson now faces a maximum penalty of 36 months in federal prison for the crime.
The players
Chowan Watson
A tax preparer who pleaded guilty to federal charges after operating a fraudulent service in Rocky Mount.
Angela Dickens
A co-operator of the tax service who previously pleaded guilty for her role in the operation.
The details
Watson and accomplice Angela Dickens operated Empire Tax Service, later renamed K&J Tax Service, to execute the fraudulent filing scheme. By artificially inflating 1099 withholding figures, the pair successfully claimed excessive refunds and collected illegitimate fees from taxpayers.
Timeline
The tax fraud scheme operated between 2017 and 2023.
Watson is scheduled to be sentenced in 2026.
Market Dynamics
This prosecution aligns with federal efforts to maintain integrity in the tax preparation industry by targeting operators who exploit the 1099 reporting system. It reflects a wider regulatory crackdown on systemic tax fraud that distorts fiscal compliance in local markets.
Taxpayers who used these services may face future inquiries from the IRS regarding their past filings. Clients are encouraged to review their tax history for discrepancies related to these fraudulent return claims.
The takeaway
Tax preparers are legally responsible for the accuracy of the returns they submit, and manipulation of withholding figures is a serious felony. Residents should ensure their tax filings are prepared by reputable professionals to avoid future legal complications.
Further reading
Learn more about federal compliance standards on our Taxes page.
More information
Access the official U.S. District Court case documents for detailed case filings.
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