A federal grand jury has handed up a 12-count indictment against William A. Nielsen of Layton, accusing him of aiding in the preparation of 12 false tax returns during 1984-87.

Nielsen, a tax return preparer, faces a maximum penalty of three years in prison and a fine of $250,000 for each count.The indictment accuses Nielsen of illegally reporting the 1985 income of Donald and Mary Cheney. Nielsen reported the couple's income at $8,865.60, but the indictment said Nielsen knew the couple's income was "substantially more."

He also falsely reported the income of Donald L. and Ann B. Hennessy as $9,238.95 in 1985 and as $11,930 in 1986, the indictment says. In both cases, Nielsen knew the couple's income was considerably more, the indictment said.

Nielsen reported that James G. and Terry L. Claxton's income for 1984 was $15,343 - a false and fraudulent claim, the indictment said.

Nielsen prepared two consecutive tax returns for Manuel A. and Patricia J. Sepulveda. He listed their 1984 income as $15,263 and their 1985 income as $20,617.57. Both claims were false and fraudulent, the indictment said. Nielsen knew in both cases that the couple's income was considerably more.

Nielsen also under-reported income of Randy J. and Kim A. Salazar as $14,671.77 in 1984 and $15,368 in 1986. He also falsified tax returns for Cilbiano R. and Rosa Rivera for 1984 and 1985; Scott K. and Jana M. Bodily for 1985; and Barton J. and Connie S. Clapier for 1985.

The Internal Revenue Service will correct the returns of the eight couples mentioned in the indictment, send them a bill for the amount owing and assess them interest, said federal tax specialist.