The United States filed a lawsuit today to bar Margaret Brown, a Detroit tax return preparer, from preparing federal tax returns for others, the Justice Depart ment announced.
According to the co mplaint, Brown prepared tax returns that falsely clai med business inco me, business expenses and education credits. For exa mple, the co mplaint states that Brown prepared a tax return in 2011 that reported that the custo mer had a barber business with inco me of $9,673 and expenses of $124. The custo mer did not have a barber business in 2011, according to the co mplaint, and had no idea where Brown obtained such infor mation. In another exa mple listed in the co mplaint, Brown allegedly reported $4,000 in qualified education expenses on a custo mer’s 2011 tax return. The co mplaint alleges that neither the custo mer nor her dependents attended college in 2011.
The co mplaint also alleges that for tax years 2010 and 2011, Brown failed to co mply with due-diligence require ments i mposed by federal law on tax preparers who claim the Earned Inco me Tax Credit on their custo mers’ tax returns.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found at this website. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.