WASHINGTON – A Texas federal court has permanently barred a Houston man from preparing federal tax returns for others, the Justice Department announced today. The court also ordered the man, Kyle C. Kasten, to provide his customer lists to the government and to mail copies of the court order to his customers. Kasten consented to the civil injunction order.
According to the government complaint in the case, Kasten operated KJ & J Tax Services, which repeatedly prepared federal tax returns claiming bogus credits and deductions and overstated customers’ tax withholding to generate larger tax refunds.
The complaint states that Kasten prepared more than 80 returns in 2007 with false claims of fuel tax credit. The credit is available only in limited circumstances for off-highway business use. Kasten claimed more than $700,000 in fraudulent refunds for his customers based on bogus fuel tax credits, according to the complaint. Fraudulently claiming the fuel tax credit is one of the Internal Revenue Service’s (IRS) " Dirty Dozen" tax scams for 2008.
"Tax preparers and their customers who claim bogus tax credits are asking for serious trouble, including substantial penalties," said Nathan J. Hochman, Assistant Attorney General of the Justice Department’s Tax Division. "The Justice Department has enjoined more than 360 tax fraud promoters and tax preparers since 2001."
Hochman thanked Justice Department trial attorney James Strong, who handled the case for the government, and Shauna Henline of the IRS's Small Business/Self Employed Division, who conducted the related IRS investigation.
Information about this case is available on the Justice Department Web site.