Burlington Woman Sentenced 25 Months for $2.1 Million Tax Fraud Scheme

Tracey Ann Hernandez, a 39-year-old Burlington tax return preparer who also faces state charges in the 2025 death of Southeast High School senior Lily Rose Hahn, was sentenced to 25 months in federal prison for a scheme that generated more than $2 million in fraudulent tax refunds.

The U.S. Attorney's Office for the Middle District of North Carolina, working with IRS-Criminal Investigation, prosecuted the case. Hernandez pleaded guilty to one count of aiding and assisting in the filing of false tax returns and was ordered to pay approximately $2.1 million in restitution to the federal government.

Prosecutors found she prepared returns that claimed fraudulent education credits, fabricated Schedule C business losses, and other manufactured deductions to generate improper refunds for clients. That approach funneled more than $2 million in fraudulent payments from the federal treasury.

The tax fraud sentence is separate from an active second-degree murder charge in Alamance County. Hernandez faces state prosecution for a June 2025 automobile crash that killed Hahn, who was a senior at Southeast High School in Burlington when she died. Alamance County District Attorney Sean Boone confirmed the defendant in both cases is the same person.

The 25-month federal prison term, followed by one year of supervised release, runs independently of whatever the state court eventually decides. Boone's office indicated the state prosecution would continue when appropriate. For Hahn's family, the parallel proceedings mean separate hearings in different court systems, each operating under its own legal standards, before either case reaches a conclusion.