WASHINGTON - The United States has asked a federal court in Savannah, Ga., to permanently bar Ophelia Kelley of Vidalia, Ga., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Kelley operates two return preparation firms in Vidalia – Kelley Tax Service, and City and Country Girl Tax Service.
The civil injunction suit alleges that Kelley, through her businesses, has repeatedly and intentionally engaged in fraudulent conduct by claiming improper deductions and tax credits for customers. According to the complaint, Kelley allegedly claims bogus fuel tax credits for customers who are not entitled to the credit. The fuel credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. It is not available for trucks driven on highways.
The complaint further alleges that Kelley fraudulently claims the credit for truck drivers, claiming absurdly large credits by falsely reporting purchases of huge quantities of fuel where, in most cases, the cost of the fuel purportedly purchased was greater than the customer’s annual income. Fuel credit scams were on last year’s IRS list of the Dirty Dozen Tax Scams. In the past few years the Justice Department has obtained injunctions shutting down many tax preparers who claim the phony credits on customers’ returns.
According to the complaint Kelley also fabricates false deductions for such things as medical expenses and charitable gifts. The complaint also says that Kelley failed to sign at least 100 tax returns she prepared for customers. Paid tax preparers are required by law to sign all returns they prepare.
In the past decade, the Justice Department’s Tax Division has obtained more than 380 injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department’s Web site, as is information about the Justice Department’s Tax Division.