The Justice Department announced today that a federal district judge in Kansas City, Mo., permanently barred Mark Steven Hall from preparing federal income tax returns for others. According to the court’s civil injunction order filed in the U.S. District Court for the Western District of Missouri, from 2006 to 2010 Hall worked as an employee or independent contractor for various accounting firms. Beginning in the 2010 tax season Hall prepared federal tax returns from his home in Kansas City.
The court found that Hall understated his customers’ tax liabilities by claiming false expenses and deductions. The court found that in some cases, Hall used a formula to claim charitable deductions without any regard to whether his customers had the necessary supporting documentation. In other instances, the court found that even where Hall’s customers provided him with documentation of charitable donations, Hall inflated those customers’ reported charitable contributions.
Similarly, the court found that although one customer provided Hall with all bank statements, invoices, ledgers, check stubs and receipts for his small business, Hall did not use those documents in preparing the return.
The court reasoned that a permanent bar on all future tax preparation was warranted because without a permanent ban, Hall “would likely find other ways to manipulate the tax system for his customers.” The court found that there was a high probability that Hall’s customers received erroneous refunds due to his conduct.
Return preparer fraud is one of the Internal Revenue Service's Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 . In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm .