WASHINGTON – The United States has asked a federal court to bar a Chicago tax preparer from preparing federal tax returns for others, the Justice Department announced today. A suit seeking a permanent injunction was filed with the U.S. District Court for the Northern District of Illinois.
According to the government complaint, Debra Windham, a former secretary with the Internal Revenue Service’s (IRS) Criminal Investigation Division, prepares returns for profit under the business name Special Circumstances. Windham allegedly prepared federal income tax returns for customers claiming false deductions and then applied without customers’ knowledge for "refund anticipation loans" in their names.
The complaint also alleges that Windham took a portion of the loan proceeds without her customers’ knowledge or permission. In some cases, she allegedly prepared two sets of returns—one for the customer and another (claiming additional bogus deductions) that she filed with the IRS. Unbeknownst to her customers, Windham allegedly pocketed the additional refund amount claimed on the filed return. As stated in the complaint, the IRS estimates a tax loss of approximately $850,000 for the returns Windham prepared for tax years 2004 through 2006.
"The IRS and Justice Department are committed to putting fraudulent return preparers out of business," said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. "Since 2001, the Justice Department’s Tax Division has obtained injunctions against more than 350 tax-return preparers and tax-fraud promoters."
Information about these cases is available on the Justice Department Web site, as is information about the Justice Department's Tax Division.