FEDERAL JUDGE IN VIRGINIA PERMANENTLY BARS NORFOLK MAN FROM PREPARING FEDERAL TAX RETURNS FOR OTHERS

Hampton Roads-Area Return Preparer Uses Frivolous Arguments to Claim Deductions

WASHINGTON, D.C. - The Justice Department announced today that a federal court has barred Anthony McBryde of Norfolk, Virginia from preparing federal income tax returns for others. The permanent injunction, to which McBryde consented, was entered by Judge Walter D. Kelley, Jr. of the U.S. District Court for the Eastern District of Virginia. In connection with the permanent injunction, the court found that McBryde prepared “erroneous federal tax returns claiming frivolous deductions on behalf of clients.” McBryde previously produced his customer list to the government as required by an earlier order in the case.

According to court filings, McBryde is a City of Norfolk code inspector who prepares for customers federal income tax returns that improperly eliminate or reduce customers’ reported taxable income. Prior to a court order enjoining him, McBryde prepared at least 187 returns containing what he calls a “claim of right” deduction. He also advises his clients to claim deductions for non-deductible personal expenses, such as residential gas and electricity bills. The government’s complaint alleges that McBryde prepares returns in the Hampton Roads area-including Norfolk, Suffolk, Chesapeake, Portsmouth, and Virginia Beach-charging customers a flat rate of approximately $60 to $130 per return plus a percentage of any tax refund they received.

“People who prepare fraudulent returns for their customers are not only defrauding the federal treasury, but also exposing their customers to potentially severe civil and criminal penalties,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Justice Department is working diligently with the IRS to put a stop to their activities.”

More information about this case is available at http://www.usdoj.gov/tax/txdv05472.htm. This suit is part of an ongoing Justice Department and Internal Revenue Service crackdown on preparers of false and fraudulent tax returns. More information about these cases is available at http://www.usdoj.gov/tax/taxpress2005.htm. The “claim of right” doctrine is number five on the IRS’s 2005 list of the “Dirty Dozen” tax scams, the complete list of which is available at http://www.irs.gov/newsroom/article/0,,id=136337,00.html. More information about the Tax Division is available at http://www.usdoj.gov/tax/index.html.