A federal judge in Sacramento, Calif., has permanently barred Teresa Marty, of Pollock Pines, Calif, and her Placerville, Calif.-based business, Advanced Financial Services LLC, from acting as federal tax return preparers, the Justice Department announced today. U.S. District Court Judge Frank C. Damrell, Jr. of the Eastern District of California entered the permanent injunction order, which adopted a 25-page recommendation of U.S. Magistrate Judge Edmund F. Brennan. The permanent injunction follows a preliminary injunction that was entered in September 2009. Marty claims to be a Certified Wealth Preservation Planner and Certified Asset Protection Planner, as well as an Enrolled Agent licensed with the State of California.
The court found that in 2008 and 2009 Marty prepared and filed fraudulent tax returns falsely reporting large fabricated amounts of federal taxes withheld. This false reporting of tax withheld led to fraudulent refund claims in amounts as large as $2.7 million per customer. The court also found that to support those fraudulent refund claims, Marty prepared and submitted false IRS 1099-OID forms on behalf of customers, showing the fabricated withholding.
The court stated that the Internal Revenue Service (IRS) had identified approximately 110 returns that Marty prepared and filed that use false 1099 forms to make fraudulent refund claims. The court noted that Marty’s "scheme lacks any support under the Internal Revenue Code, case law, or any other authority."
In addition to barring Marty from preparing federal tax returns, the court ordered her to give the Justice Department her complete customer list and to notify her customers of the injunction. More information about the case is available in an earlier Justice Department press release .
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Tax Division trial attorney John Monroe, who handled the case, and Shauna Henline, of the IRS’ Small Business/Self Employed Division, who conducted the investigation.
In the past decade the Justice Department has obtained injunctions against more than 455 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.