WASHINGTON - A federal court has ordered CPA Steven W. McCann, who operates a firm called SWMc Services in the Houma, La., area, to stop claiming improper tax deductions on federal income tax returns he prepares for customers, the Justice Department announced today. McCann agreed to the civil injunction order.
According to the government complaint filed in the case, McCann prepared nearly 1,000 federal income tax returns claiming fraudulent employee expense deductions for customers who work as mariners. The government alleged that these deductions were false because the expenses McCann claimed for his customers were never paid by the clients. Instead, their employers provided the items being deducted, including meals and other incidental expenses. In 2007, a federal court in Los Angeles barred another CPA, Martin A. Kapp, from promoting a similar scheme.
"The IRS and Justice Department are committed to stopping tax preparers who continue to promote the mariner’s tax deduction, which courts have held is frivolous," said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. "The Justice Department has obtained injunctions against more than 365 tax return preparers and tax-fraud promoters since 2001." Information about those cases is available on the Justice Department Web site.
Assistant Attorney General Hochman thanked trial attorney Grayson Hoffman and IRS revenue agent Phil Rampey for their efforts in obtaining this injunction for the government.