A federal district judge in St. Louis has permanently barred defendants Joseph Burns, Joseph Thomas and International Tax Service Inc. from preparing federal tax returns for others, the Justice Department announced today. The defendants consented to the permanent injunction after the government filed a complaint and a motion for preliminary injunction. A hearing on that preliminary injunction motion, which resolves the case, was scheduled to commence today.
The complaint alleged that, from 2005 until late 2011, Thomas worked as a tax return preparer for Burns, who was doing business as Electronic Tax Service, but in early 2012, Thomas opened his own tax preparation business, called International Tax Service Inc. Burns and Thomas operated their respective tax preparation businesses from the same building, located at 4144 Lindell Boulevard in the Midtown neighborhood of St. Louis. According to the complaint, the defendants repeatedly fabricated expenses and deductions on customers’ returns and falsely claimed head of household status for customers who were married in order to illegally understate their customers’ federal tax liabilities and to obtain fraudulent tax refunds. The complaint also alleged that the defendants falsely claimed that some of their customers earned income from businesses that the defendants fabricated or increased the amount of business income their customers earned in order to illegally claim the maximum earned income tax credit on customers’ returns. In one example cited in the complaint, a customer of Burns told him that she made approximately $1200 for the year styling hair, but Burns claimed the customer had a beautician business and fabricated $16,900 in income which he reported on the customer’s tax return. As alleged in the complaint, the IRS estimates that the annual tax loss from the returns prepared by the defendants could be as much as $6 million.
Return preparer fraud is one of the IRS's Dirty Dozen Tax Scams for 2013 . The IRS has tips for choosing a tax preparer www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional . In the past decade, the department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website .