EFIN Responsibility, Circumstantial Mens Rea, and the Zero‑Point Offender Carve‑Out: The Eleventh Circuit Affirms Managerial Role Enhancement and Loss Extrapolation in Tax‑Preparer Fraud

EFIN Responsibility, Circumstantial Mens Rea, and the Zero‑Point Offender Carve‑Out: The Eleventh Circuit Affirms Managerial Role Enhancement and Loss Extrapolation in Tax‑Preparer Fraud

Case: United States v. Wesner Jean‑Pierre, No. 24-12002 (11th Cir. Sept. 3, 2025) (unpublished)

Introduction

In this non‑precedential but instructive decision, the Eleventh Circuit affirmed a 26‑month sentence imposed on a Florida tax preparer for aiding and assisting in the preparation of false income tax returns, in violation of 26 U.S.C. § 7206(2). The appeal centered on three sentencing issues: (1) whether a two‑level aggravating role enhancement under U.S.S.G. § 3B1.1(c) (manager/supervisor) was supported by the evidence; (2) whether the defendant qualified for the two‑level “Zero‑Point Offender” reduction under U.S.S.G. § 4C1.1; and (3) whether the district court clearly erred in its loss calculation, which largely extrapolated from widespread, anomalous Fuel Tax Credit (FTC) claims on returns filed under the defendant’s EFIN.

The panel’s opinion clarifies three practical points for federal sentencing in tax‑preparer cases:

  • Circumstantial evidence can suffice to establish that a subordinate was a “criminal participant,” supporting a § 3B1.1(c) managerial enhancement, even absent direct testimony about the subordinate’s subjective knowledge.
  • A defendant who receives an aggravating role adjustment under § 3B1.1 is ineligible for the “Zero‑Point Offender” reduction under § 4C1.1 (as the Sentencing Commission later clarified in Amendment 831).
  • In tax cases, a loss estimate may permissibly extrapolate from a demonstrated pattern of false FTC claims, especially where consistent with client interviews, the defendant’s own returns, and national anomaly rates, and where the owner’s EFIN ties them to all returns filed through the business.

Summary of the Judgment

The Eleventh Circuit affirmed the sentence in full. It held that:

  • Managerial enhancement (§ 3B1.1(c)): No clear error in finding the defendant was a manager/supervisor. As owner of WJP Financial Services, he exercised authority over employees and was responsible for returns filed through his EFIN. Circumstantial evidence supported that at least one employee (Haynes) knowingly assisted the fraudulent scheme, satisfying the requirement of another “participant.”
  • Zero‑Point Offender reduction (§ 4C1.1): Properly denied because the defendant received an aggravating role enhancement. Under the 2023 guideline text and the Sentencing Commission’s 2024 clarification (Amendment 831), the aggravating role alone disqualifies defendants irrespective of whether they engaged in a continuing criminal enterprise.
  • Loss calculation: No clear error in using a conservative yet extrapolated loss estimate that centered on 100% of fraudulent FTCs across returns filed using the defendant’s PTIN and EFIN, together with tax due from client interviews and the defendant’s personal returns. The pattern of FTC abuse (69% of returns versus 0.3%–0.4% national averages), corroborated by client statements and the defendant’s admissions, justified the inference that all FTC claims in the dataset were false.

The district court granted a downward variance and imposed concurrent 26‑month terms, followed by one year of supervised release, and later ordered $830,840 in restitution (not appealed).

Case Background

The defendant, a tax preparer and owner of WJP Financial Services in Pensacola, pled guilty to 34 counts of aiding and assisting in the preparation of false returns. The returns contained fabricated items (e.g., Schedule C entries, itemized deductions, Child Tax Credit components, American Opportunity Credits, and notably, Fuel Tax Credits) to inflate refunds. The IRS investigation began after detecting a suspicious pattern across 1,949 returns, and included undercover operations, client interviews, and analysis of returns filed using the defendant’s EFIN and various PTINs. Employees frequently used each other’s PTINs, obscuring preparer identity; however, the EFIN tied responsibility to the business owner. Client interviews uniformly indicated false FTC entries with no supporting documentation. The defendant’s own returns falsely claimed gasoline for off‑highway use and “inner‑city bus” use, despite his only personal vehicle being a Dodge Challenger.

Analysis

Precedents Cited and Their Influence

  • United States v. Washington, 714 F.3d 1358 (11th Cir. 2013), and United States v. Perez‑Oliveros, 479 F.3d 779 (11th Cir. 2007): The government bears the burden to prove guideline enhancements by a preponderance with “sufficient and reliable” evidence. In practice, the government met this burden through the PSI, agent testimony, client interviews, and the defendant’s admissions.
  • United States v. Shabazz, 887 F.3d 1204 (11th Cir. 2018): Managerial role determinations are reviewed for clear error. The panel deferred to the district court’s plausible view that the defendant managed at least one criminal participant (Haynes).
  • United States v. Cavallo, 790 F.3d 1202 (11th Cir. 2015): Loss is a factual finding reviewed for clear error; courts may estimate loss reasonably from available information. This justified the district court’s reliance on FTC‑based extrapolation as a conservative proxy.
  • United States v. Isaac, 987 F.3d 980 (11th Cir. 2021); United States v. Rothenberg, 610 F.3d 621 (11th Cir. 2010): Clarify the “definite and firm conviction” standard for clear error, underscoring deference to plausible factual findings.
  • OHI Asset (VA) Martinsville SNF, LLC v. Wagner (In re Wagner), 115 F.4th 1296 (11th Cir. 2024): Reinforces high deference to the factfinder’s choice between permissible views—key to upholding the loss estimate and managerial finding.
  • United States v. Matthews, 3 F.4th 1286 (11th Cir. 2021): Sentencing courts may rely on the PSI, plea admissions, hearing evidence, and reasonable inferences; this opened the path to draw inferences from anomalies and client statements.
  • United States v. Philidor, 717 F.3d 883 (11th Cir. 2013); United States v. Chavez, 584 F.3d 1354 (11th Cir. 2009): Courts may rely on common‑sense inferences but not speculation. The FTC pattern, coupled with interviews and the defendant’s own misuse, supported non‑speculative inferences.
  • United States v. Baldwin, 774 F.3d 711 (11th Cir. 2014); United States v. Barrington, 648 F.3d 1178 (11th Cir. 2011): A court may not speculate to inflate sentences, but here the record supported the inferences drawn.
  • United States v. Harris, 741 F.3d 1245 (11th Cir. 2014); United States v. Utsick, 45 F.4th 1325 (11th Cir. 2022): Plain error applies to unpreserved constitutional challenges; the defendant’s due process framing did not alter the outcome given the absence of clear error.
  • United States v. Dixon, 901 F.3d 1322 (11th Cir. 2018) (relying on United States v. Martinez, 584 F.3d 1022 (11th Cir. 2009)): Enumerates the factors for § 3B1.1. Evidence of control, decision‑making, and scope sufficed here.
  • United States v. Zitron, 810 F.3d 1253 (11th Cir. 2016): A “participant” need not be convicted; knowingly assisting the tax scheme suffices. This supported treating Haynes as a participant.
  • United States v. Smith, 548 F.2d 545 (5th Cir. 1977); United States v. Wetzel, 514 F.2d 175 (8th Cir. 1975): Mens rea may be proven circumstantially—the court could infer Haynes’s knowledge from conduct mirroring the scheme.
  • United States v. Zayas, 141 F.4th 1217 (11th Cir. 2025): In financial crimes requiring willfulness, juries regularly infer mens rea from irregular patterns and context—bolstering reliance on anomalies here.
  • United States v. Gupta, 572 F.3d 878 (11th Cir. 2009): Courts should not “split the difference” without evidentiary grounding. The district court here anchored its estimate in concrete sources (client interviews, the defendant’s returns, and FTC datasets).
  • United States v. Maitre, 898 F.3d 1151 (11th Cir. 2018): Even where specific loss findings are sparse, the record can uphold the determination—relevant to the conservative, evidence‑tethered approach used.
  • U.S.S.G. § 2T1.1(c)(1)(A): Tax loss defaults to 28% of unreported income plus 100% of false credits unless a more accurate figure is available. The court properly used 100% of FTCs as the more accurate measure given the record.
  • United States v. Annamalai, 939 F.3d 1216 (11th Cir. 2019); United States v. Mehta, 594 F.3d 277 (4th Cir. 2010): Extrapolation can be too speculative in some circumstances. The panel distinguished those concerns because the record here showed a pervasive, corroborated pattern.
  • United States v. Esformes, 60 F.4th 621 (11th Cir. 2023); Anderson v. City of Bessemer City, 470 U.S. 564 (1985): If the district court’s account is plausible in light of the whole record, appellate courts do not reverse—critical to upholding fact‑intensive sentencing judgments.
  • U.S. Sentencing Commission Amendments: Amendment 821 (effective Nov. 1, 2023) introduced § 4C1.1 “Zero‑Point Offender”; Amendment 831 (effective Nov. 1, 2024) clarified that an aggravating role or a continuing criminal enterprise independently defeats eligibility—tracking the district court’s reading and the panel’s affirmance.

Legal Reasoning

1) Aggravating Role Enhancement (§ 3B1.1(c))

The court upheld the two‑level managerial role enhancement. As the owner of WJP, the defendant exercised decision‑making authority and control, satisfying core § 3B1.1 factors. His EFIN made him responsible for all returns transmitted by the firm. Employees interchanged PTINs (itself a red flag the court deemed attributable to the owner), and the defendant was present when an employee prepared an undercover agent’s return containing false entries, including FTCs and a fictitious Schedule C.

Crucially, the court rejected the argument that no evidence showed the employee’s willful participation. While direct testimony from the subordinate was absent, circumstantial evidence—mirroring the broader fraudulent pattern, preparing an anomalous return in the defendant’s presence without documentation, and failing to review the return with the client—supported the inference that she “knowingly assisted” the scheme. Under Zitron, that sufficed to deem her a “participant,” enabling the managerial enhancement.

2) Zero‑Point Offender Reduction (§ 4C1.1)

The court held that the defendant was ineligible for the two‑level reduction because he received an aggravating role under § 3B1.1. The panel’s reading accords with the Sentencing Commission’s subsequent Amendment 831 (Nov. 1, 2024), which clarified that either (i) an aggravating role or (ii) engagement in a continuing criminal enterprise independently disqualifies a defendant from § 4C1.1 relief. The district court had also found no “continuing criminal enterprise” as defined in 21 U.S.C. § 848, but that finding did not save the reduction given the role enhancement.

3) Loss Calculation

The district court made a “conservative” estimate centered on 100% of FTC amounts, plus tax due and owing corroborated by interviews, and credits shown on the defendant’s own returns. The court credited the IRS agent’s testimony that:

  • WJP’s FTC usage was radically higher than national averages (69% of returns versus ~0.3–0.4%),
  • Every interviewed client with FTC entries disclaimed eligibility or supporting documentation,
  • The defendant’s own returns falsely claimed gallons for off‑highway/business use and “inner‑city bus” gasoline despite ineligible vehicles, and
  • The defendant admitted not having read FTC instructions.

Given that backdrop, the court permissibly inferred that all FTCs within the EFIN/PTIN dataset were false and used them as a proxy for loss. This approach fits within U.S.S.G. § 2T1.1(c)(1)(A)’s directive to count 100% of false credits and to prefer a “more accurate determination” over the 28% default when supported by the record. While the defense argued extrapolation was speculative, the panel emphasized that sentencing fact‑finding allows reasonable inferences grounded in common sense and experience, and the district court’s view was at least one plausible reading of a robust record.

Impact and Forward‑Looking Significance

Although unpublished and therefore non‑binding, this decision offers practical guidance that will likely influence district court sentencing in the Eleventh Circuit and beyond:

  • Managerial liability via EFIN responsibility: Owners of tax‑prep firms should expect courts to attribute control and oversight responsibilities to them for returns filed through their EFIN, even when PTIN swapping obscures individual preparers. That oversight connection can satisfy § 3B1.1(c) control and scope factors.
  • Circumstantial proof of subordinate culpability: Sentencing courts may infer a subordinate’s willfulness from consistent patterns of fraud, in‑office conduct, and the firm’s processes, without direct testimony of subjective knowledge.
  • Zero‑Point Offender narrowing: After Amendment 831, any aggravating role enhancement categorically forecloses the § 4C1.1 reduction, regardless of whether a continuing criminal enterprise is found. Expect more litigation to turn on avoiding § 3B1.1 in the first instance.
  • Loss estimates in tax‑preparer cases: When a discrete category of false credits (like FTCs) is pervasive and corroborated by interviews and anomalies, courts may extrapolate across a dataset to estimate loss. Reliance on national averages gains force when combined with company‑specific red flags and admissions.
  • Plea and mitigation strategy: Defense counsel in tax‑preparer cases should anticipate the government’s use of EFIN‑level responsibility and patterns of anomalous credits to support both role enhancements and broader loss estimates. Early, credible documentation of due diligence and client eligibility screening may be critical to rebut inferences of willfulness and scope.

Complex Concepts Simplified

  • EFIN vs. PTIN: An EFIN is the firm’s authorization to e‑file returns; the owner is responsible for filings transmitted under it. A PTIN identifies the individual preparer. If employees swap PTINs, the EFIN still anchors responsibility to the firm’s owner.
  • Fuel Tax Credit (FTC): A credit for tax on fuel used in off‑highway business uses (e.g., farm equipment). It is rare on individual returns. Claims require specific eligibility and documentation; misuse is a common fraud marker.
  • Aggravating Role (§ 3B1.1): Adds offense levels if the defendant was an organizer, leader, manager, or supervisor. Requires at least one other “participant,” i.e., a person criminally responsible (not necessarily convicted). Control, decision‑making, and the scheme’s scope are key factors.
  • Zero‑Point Offender (§ 4C1.1): A two‑level reduction for defendants with no criminal history points who also satisfy ten criteria. Amendment 831 clarifies that receiving any § 3B1.1 aggravating role enhancement by itself disqualifies a defendant.
  • Position of Trust (§ 3B1.3) vs. Role: In tax cases, § 2T1.4’s commentary avoids double‑counting by allowing either a role enhancement or an abuse‑of‑trust/special‑skill enhancement, but not both; here, the court indicated either would apply, and it chose the role adjustment.
  • Relevant Conduct: At sentencing, courts may consider acts that were part of the same course of conduct or scheme as the offense of conviction, proven by a preponderance.
  • Tax Loss (§ 2T1.1(c)(1)(A)): Generally 28% of unreported income (34% for corporations) plus 100% of false credits unless a more accurate measure is available. Here, pervasive false FTCs supplied that “more accurate” measure.
  • Standards of Review: “Clear error” is highly deferential. If the district court’s view of the evidence is plausible, the appellate court will not disturb it. Unpreserved constitutional claims are reviewed for plain error.
  • Downward Variance: A discretionary reduction from the guideline range based on the statutory sentencing factors (18 U.S.C. § 3553(a)); the district court balanced general deterrence against restitution and the defendant’s otherwise law‑abiding life.

Conclusion

The Eleventh Circuit’s decision in United States v. Jean‑Pierre underscores three lessons for federal sentencing in tax‑preparer fraud cases. First, ownership and EFIN responsibility, combined with circumstantial proof of a subordinate’s knowing assistance, can sustain a managerial role enhancement under § 3B1.1(c). Second, receipt of that role enhancement categorically bars the “Zero‑Point Offender” reduction under § 4C1.1, a reading aligned with the Sentencing Commission’s clarifying Amendment 831. Third, in estimating tax loss, a district court may reasonably extrapolate from a demonstrated pattern of fraudulent FTCs across returns filed under a defendant’s EFIN, particularly where the pattern is corroborated by client interviews, national anomaly rates, and the defendant’s own misuse.

While unpublished, the opinion offers a practical roadmap for how courts can connect business‑level control to sentencing enhancements, how Amendment 821/831 limits the availability of the new zero‑point reduction, and how loss may be anchored in conservative, evidence‑based extrapolation. For practitioners, these points will be pivotal in both charging and sentencing advocacy in tax‑preparer and similar service‑provider fraud prosecutions.

Case Details

Year: 2025
Court: Court of Appeals for the Eleventh Circuit

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