WASHINGTON - The United States has filed a suit in Brooklyn federal court seeking to bar Archie J. Pugh Jr. and his brother Theodore Pugh from preparing federal income tax returns for others, the Justice Department announced today.
The civil injunction suit, filed in the U.S. District Court for the Eastern District of New York, alleges that the Pughs, who operate Archie’s Tax and Accounting Service in Jamaica, N.Y., prepare tax returns for customers based on the so-called “claim of right” argument—a frivolous claim that compensation for labor is not subject to federal income tax. The suit alleges that the Pughs have prepared more than 80 frivolous tax returns since 2000 that have caused losses to the U.S. Treasury exceeding $2.4 million.
The government’s civil injunction suit asks the court to order the Pughs to give the Justice Department a list of their customers’ names, addresses, e-mail addresses, and Social Security numbers.
Since 2001 the Justice Department has obtained more than 240 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. More information about these cases is available on the Justice Department Web site at http://www.usdoj.gov/tax/taxpress2007.htm. More information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax/index.html.