FEDERAL COURT HALTS TAX RETURN PREPARER FROM PREPARING TAX RETURNS FOR HIS CLIENTS

WASHINGTON, D.C.- A federal judge has ordered James L. Wray of Nashville, Tenn. to stop preparing income tax returns. In a permanent injunction issued Monday, United States District Judge John T. Nixon found that, for a flat fee or a percentage of the refund, Wray would prepare tax returns reporting fictitious expenses, or claiming tax deductions that are not allowable under the Internal Revenue Code. The injunction also requires Wray to notify his clients that he can no longer prepare returns and to provide the Internal Revenue Service with a list of those clients within twenty days.

"The Tax Division of the Department of Justice is determined to stop the promotion and practice of tax fraud," said Eileen J. O'Connor, Assistant Attorney General for the Tax Division. "This injunction should help assure people who pay their taxes that those who don't, or those who encourage others not to, will not get away with it."

The government's complaint alleged that Wray solicited clients by claiming he could obtain tax refunds, which he referred to as "found money," and that he falsely represented he was a former employee of the Internal Revenue Service. According to the complaint, many of Wray's clients have been audited by the Internal Revenue Service and have been required to pay additional taxes and penalties. In a statement filed in court, one client said that Wray prepared a tax return for her claiming she had paid alimony, when in fact, she had received alimony. As a consequence of the false claim, the client ended up owing the government several thousand dollars. To date, the Internal Revenue Service has identified 126 returns Wray prepared, falsely claiming almost $300,000 in refunds.

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