WASHINGTON – A federal court in San Diego has barred Roosevelt Kyle from preparing tax returns for others, the Justice Department announced today. The court found that Kyle, a resident of San Diego, and his businesses prepared and filed approximately over 10,000 returns since 2000, and the estimated tax loss from the fraudulent returns exceeds $18 million.
In the preliminary injunction order entered in the civil case, Chief Judge Irma E. Gonzalez of the U.S. District Court for the Southern District of California noted that Kyle, who has prepared income tax returns for 25 years, had been previously convicted and incarcerated in 2006 for failing to file federal income tax returns. The court found that the Internal Revenue Service examined over 200 returns prepared by Kyle or his businesses between 2002 and 2007 and all but eight of those returns understated the customer’s tax liability.
Additionally, the court found that Kyle willfully, intentionally, and/or recklessly understates his customers’ income tax liabilities by preparing returns that improperly contain fabricated or inflated deductions. For example, the court noted that in preparing a tax return for an undercover IRS agent that Kyle promised the undercover agent that he would use his “creative” mind to reduce the undercover agent’s tax liability. According to the court’s order, the return Kyle prepared for the undercover agent fabricated employee business expenses (e.g., bogus expenses for laundry and upkeep) and charitable deductions (e.g., fictitious charitable deductions to the Girl Scouts and Goodwill) to turn a tax due and owing into a tax refund.
In granting the preliminary injunction banning Kyle from any type of tax preparation activities, the court found that the “unrealistic positions Kyle took on the returns he prepared were frivolous and without a reasonable basis.”
“The Tax Division and the IRS will seek to stop cold fraudsters like Kyle wherever and whenever they peddle their illicit tax return services,” Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division.
Since 2001, the Justice Department’s Tax Division has obtained more than 310 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website, as is information about the Justice Department’s Tax Division.