Former IRS employee sentenced to prison for tax fraud and Social Security fraud

Date: March 6, 2026

Contact: [email protected]

BOSTON - A former Internal Revenue Service (IRS) employee has been sentenced in federal court in Boston for filing false tax returns in order to fraudulently obtain tax refunds and stealing Social Security benefits.

Kathleen Mannion of Lawrence was sentenced on March 4, 2026, by U.S. Senior District Court Judge Nathaniel M. Gorton to 18 months in prison, to be followed by three years of supervised release. In May 2025, Mannion pleaded guilty to four counts of aiding and assisting in the preparation and filing of a false tax return and one count of theft of government money. Mannion was charged in March 2025.

From 1998 to 2009, Mannion worked as an IRS contact representative in Andover, Mass. Between approximately July 2020 through April 2023, Mannion prepared and filed income tax returns for other individuals with the IRS. Even though Mannion prepared these returns on behalf of other individuals, she did not list herself as the tax return preparer. Instead, Mannion prepared the returns to appear as if the taxpayers prepared the returns on their own. Further, Mannion listed ineligible dependents on the tax returns, resulting in higher refund amounts for which the taxpayers did not qualify without the knowledge of the taxpayers. Mannion also filed forms with the IRS directing that a portion of the fraudulently obtained tax refunds be deposited in her personal bank accounts, which she then used for her personal benefit.

Separately, between April and October 2020, Mannion applied for Social Security retirement, spouse and widow benefits with the Social Security Administration (SSA) via telephone for other individuals. Unbeknownst to these beneficiaries, Mannion directed SSA to deposit the Social Security benefits in her personal bank accounts, which she also used for her personal benefit.

United States Attorney Leah B. Foley; Thomas Demeo, Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office; and Amy Connelly, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division made the announcement. Special Assistant U.S. Attorney James J. Nagelberg of the Major Crimes Unit prosecuted the case.

IRS-CI is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. It is the only federal law enforcement agency with investigative jurisdiction over violations of the Internal Revenue Code. IRS-CI has 18 field offices located across the U.S. and maintains an international presence through attaché posts abroad.