WASHINGTON – The United States has asked a federal court to permanently shut down a Miami tax return preparer and his business, the Justice Department announced today. The government complaint, filed in U.S. District Court in Miami, alleges that David Santiago and his business, Santiago Investment & Consulting Inc., prepare returns for customers that falsely claim the First-Time Homebuyer Credit and report other false income and expense items.
Congress enacted the First-Time Homebuyer Credit in 2008 to strengthen the real estate market and help the economy. It allowed persons who have not owned a home in the previous three years to claim a credit of up to $8,000 against their federal income taxes if they bought a home after April 8, 2008. The credit has since been expanded to allow, under certain conditions, current homeowners to claim the credit for a purchase of a new home. But in order for a taxpayer to claim the credit a home must have actually been bought during the tax year for which the credit is claimed.
The government complaint alleges that Santiago claimed the credit on customers’ returns even though he knew that they had not bought new homes. The complaint also alleges that Santiago claimed fabricated business deductions on some customers’ returns. Santiago also allegedly failed to keep adequate customer records or copies of the returns he prepared. A preparer’s failure to keep adequate records can subject him to civil penalties and an injunction.
Last October a federal court in Texas permanently barred a woman from preparing returns for others in a case where the Justice Department alleged abuse of the homebuyer credit and other tax law provisions.
Return preparer fraud is identified on the IRS Web site one of the 2010 "Dirty Dozen" tax scams.
Over the past decade, the Justice Department’s Tax Division has obtained more than 455 injunctions to stop tax fraud promoters and dishonest tax preparers. Information about these cases is available on the Justice Department Web site.