The Justice Department announced today that it has sued two Miami tax return preparers, seeking to bar them from preparing federal tax returns for others. The civil injunction suit alleges that Marlen Monzon, her son Yanko Rodriguez, and their Miami business, Tri Stars Multiservices Corporation, claim bogus deductions and credits on customers’ federal tax returns.
Monzon and Rodriguez allegedly included fabricated claims for business expenses on customers’ tax returns even though the customers have no business. According to the complaint, these fabricated expenses offset the customer’s wage income and improperly lower the customer’s reported taxable income. This generates (or increases) a refund, and often qualifies customers for credits to which they are not entitled. The complaint alleges that the Internal Revenue Service has examined 498 tax returns for tax years 2008 through 2011, and found that nearly every return claimed that the customer operated a nonexistent business and reported a business loss. This allegedly reduced the customers’ reported tax liability by an average of $7,031 per return, for a total of $3,494,336 in lost revenue.
According to the complaint, in 2008, the IRS assessed penalties against Monzon in the amount of $43,000 based on her preparation of tax returns claiming bogus Fuel Tax Credits. The complaint alleges that, rather than claiming bogus Fuel Tax Credits, Monzon now simply reports bogus gasoline expenses related to nonexistent businesses on her customers’ tax returns.
In the past 10 years the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Website .