WASHINGTON - The Justice Department announced today that it has sued Donald A. Gray, of Portage, Mich., to bar him from preparing federal tax returns for others. The government complaint, filed yesterday in U.S. District Court in Grand Rapids, Mich., alleges that Gray prepares false replacement W-2 wage statements for customers to reduce or eliminate the income their employers correctly reported. Gray then allegedly files the false replacement W-2 forms with customers’ income tax returns, fraudulently claiming a tax refund. The suit seeks a court order requiring Gray to give the government a list of his customers’ names, addresses, Social Security numbers, telephone numbers and e-mail addresses.
“People who prepare fraudulent tax returns expose themselves and their customers to the risk of substantial civil penalties and criminal prosecution,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Justice Department and Internal Revenue Service are working vigorously to stop the preparation and filing of fraudulent tax returns.”
The government’s suit alleges that Gray is following a scheme promoted by Peter Eric Hendrickson, of Commerce Township, Mich. The government sued Hendrickson and several other alleged tax resisters last year to recover erroneous refunds they allegedly received after filing tax forms and returns similar to Gray’s. More about those suits can be found at http://www.usdoj.gov/tax/txdv06219.htm. The suit against Gray alleges that a number of the defendants in those suits have been ordered to repay erroneous tax refunds.
Fraudulent returns with false W-2 and 1099 forms are first on the IRS’s list of the “Dirty Dozen” tax scams posted at http://www.irs.gov/newsroom/article/0,,id=154293,00.html.
Since 2001, the Justice Department’s Tax Division has obtained more than 215 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. More information about the Justice Department’s efforts to stop tax scams can be found at http://www.usdoj.gov/tax/taxpress2007.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.