JUSTICE DEPARTMENT SUES TOLEDO TALK-SHOW HOST
ALLEGED TO HAVE MADE BOGUS TAX-REFUND CLAIMS

Government Alleges Dennis Schaffer Understated Income For 1997 And 1998

WASHINGTON, D.C.– The Department of Justice filed a lawsuit today against Dennis R. Schaffer, claiming he had filed false claims for income-tax refunds based on a scheme promoted on his Toledo, Ohio radio show. The complaint was filed in federal court in Ohio.

Alfred Abdo Jr., a North Carolina return preparer who appeared on Schaffer's radio talk show on WVKS FM in Toledo, prepared the returns. On the show, he falsely claimed that social security taxes should be excluded from income. In 2001, a federal court in North Carolina barred Abdo from promoting or preparing returns based on the scheme.

"The Justice Department is serious about stopping fraudulent tax schemes," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. "When a return preparer promises results that sound too good to be true, they usually are. We will ask courts to shut down phony tax schemes and will seek to recover ill-gotten gains."

Today's complaint alleges that in the year 2000 Schaffer filed amended 1997 and 1998 federal income tax returns claiming refunds based in large part on reducing his income by the amount of social security taxes withheld from his pay. The tax code does not allow a deduction for social security taxes paid. According to the complaint, the Internal Revenue Service initially failed to detect the frivolous nature of Schaffer's refund claims and erroneously refunded nearly $3,400 to him.

This case is part of the Justice Department's ongoing initiative to stop the promotion of fraudulent tax schemes. In this fiscal year the Department has filed 12 cases seeking injunctions against promoters of fraudulent tax schemes and has filed four actions to recover erroneous refunds that were part of these tax schemes.

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