WASHINGTON, D.C. – The Justice Department today asked a federal court to permanently bar Joyce M. Stone, Charles J. Freed and Julie Shaffer, all of Hillsdale, Michigan, from preparing federal income tax returns for others. The government’s complaint, filed in the U.S. District Court for the Western District of Michigan in Grand Rapids, alleges that the defendants prepared customers’ income tax returns claiming improper deductions, including improper deductions for fictitious or inflated charitable contributions and employee expenses.
The complaint alleges that Stone, assisted by her son, Freed, own and operate Stone and Associates, a Hillsdale business that the government also sued. The government alleges that, acting either individually or through their business, Stone and Freed prepare income tax returns for about 1,000 clients. The government also alleges that Shaffer prepares income tax returns for over 1,000 clients, and also has assisted in the e-filing of returns prepared by Stone or Freed. The government projects that the returns that Stone, Freed or Shaffer prepared for the 2000 through 2003 tax years may have cost the U.S. treasury more than $25 million. The government also sought an order directing the defendants to provide the government their customers’ names, telephone, and Social Security numbers, as well as their mailing and e-mail addresses.
“The Justice Department is working vigorously to stop the preparation and filing of the false or fraudulent returns that unfairly shift the tax burden to honest American taxpayers,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “People who hire others to prepare their returns should review their returns carefully to make sure that they are true, correct, and complete.”
The government’s complaint is part of an ongoing crackdown on return preparers who are giving false advice. The Justice Department has sought and obtained more than 150 injunctions against promoters and return preparers who prepare false or fraudulent federal tax returns since 2001. More information about these cases is available at http://www.usdoj.gov/tax/TEN.htm. More information about the Tax Division is available at http://www.usdoj.gov/tax/index.html.