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FOR IMMEDIATE RELEASE
Wednesday, February 25, 2009
United States Sues to Shut Down Florida Tax Return Preparer
Jacksonville Area Woman’s Allegedly Bogus Claims Said to Cost U.S. Treasury Nearly $750,000

WASHINGTON - The United States has filed suit against a Jacksonville, Fla., tax return preparer, seeking to shut down her business, the Justice Department announced today. According to the government complaint, Shirley Clark, who operates the Nichet Corp., has prepared at least 1,250 federal tax returns for her customers from 2004 until 2007 and, on those returns, Clark has claimed nearly $750,000 in fraudulent fuel tax credits. The complaint also alleges that Clark prepared returns that fabricated her customers’ income and expenses in order to fraudulently maximize the earned income tax credit (EITC).

The fuel tax credit is a credit available only to taxpayers who operate farm equipment or off-highway business vehicles. The complaint alleges that Clark fraudulently claims this credit for truck drivers who are not qualified to receive the credit. Moreover, the complaint asserts that Clark claimed absurdly large credits by falsely reporting purchases of huge quantities of gasoline; in most cases, the cost of the gasoline was more than the customers’ annual income.

Clark, according to the complaint, also fabricated earned income and/or expenses for her customers in order to attain the "sweet spot" and improperly maximize their earned income tax credit. As an example, the complaint details how Clark engaged in a pattern of using fabricated beauty salon or beautician income on Schedules C to hit the EITC sweet spot. The complaint asserts that Clark listed business income for fake salons that purportedly had no cost of goods sold and no expenses. In most cases, according to the complaint, without the fake earned income and/or expenses, her customers would not have earned enough to qualify for the earned income tax credit.

The complaint asks the court to order Clark to stop preparing returns and to turn over her customer list to the Justice Department. In the past decade, the Justice Department has obtained injunctions against more than 375 tax return preparers and tax-fraud promoters. Information about the Justice Department’s Tax Division and its efforts to enjoin tax return preparers and tax-fraud promoters is available on the Justice Department Web site.

09-165
Tax Division
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