A federal court permanently barred a Gary, Ind., tax-preparation firm and its owner, John Newlin, from preparing tax returns for others, the Justice Department announced today. The civil injunction order, to which Newlin and Quick Sam agreed without admitting the allegations against them, was signed by Judge Jon E. DeGuilio of the U.S. District Court of the Northern District of Indiana.
The government in the civil injunction suit alleged that Newlin’s business, Quick Sam Tax Refund, had repeatedly prepared federal income tax returns that unlawfully understated customers’ income tax liabilities. According to the complaint, Quick Sam guaranteed its customers that they would receive the largest refund by getting their taxes prepared at Quick Sam. In order to deliver on this promise, the complaint alleges, Quick Sam employees fabricated bogus business expenses, claimed improper tax credits, and reported fictitious dependents to illegally increase customers’ tax refunds. Newlin and Quick Sam allegedly gave bonuses to employees for engaging in these fraudulent practices.
Several Quick Sam employees have been accused of fraud in the past, according to the complaint. Charles Standifer, Rhonda Murphy, Chanel Bandy and Brittaney Walker-Lipsey, all former Quick Sam tax return preparers, have pled guilty to tax-related crimes. The complaint alleges that the total harm to the government caused by Newlin and Quick Sam’s illegal conduct possibly exceeded $35 million in lost tax revenue.
Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .