WASHINGTON – The United States has asked a federal court in Los Angeles to bar Elton L. Barnes Jr. from preparing tax returns for others, the Justice Department announced today.
In 2002, Barnes pleaded guilty to aiding and assisting in the preparation of false tax returns, but he resumed preparing returns when he was released from prison, the government alleges. Since then, according to the complaint, Barnes has repeatedly prepared federal income tax returns, sometimes working under the names McNair Group, So Cal Financial Services and Anderson Investment Group, with fraudulent claims such as falsely inflated charitable contribution deductions and losses from imaginary home businesses. The complaint further alleges that Barnes has prepared returns that intentionally overstate the amount of federal income tax that has been withheld from his clients' paychecks in order to claim a larger refund.
According to the complaint, the Internal Revenue Service (IRS) has chosen to audit more than 180 tax returns that Barnes prepared and that have been filed since his release from prison in 2009. The complaint also alleges that, although it has not completed its audits of all those returns, the IRS has already identified almost $2 million in false refund claims and understatements of taxes owed.
The complaint also alleges that Barnes met with a customer and obtained the customer's personal identifying information, including his name, address and social security number. Allegedly, without the customer's knowledge, Barnes then used the customer's information to file a tax return that directed the IRS to deposit the claimed tax refund into Barnes' bank account. The United States has identified more than 50 tax refunds that were deposited into bank accounts Barnes controls, although some deposits may have been made with the knowledge of Barnes' clients. It is against federal law for a tax return preparer to deposit a client's tax refund into his own bank account. According to the complaint, Barnes violated other laws that apply to return preparers by failing to sign returns he prepared or use his preparer tax identification number on them.
Return-preparer fraud is one of the IRS' Dirty Dozen Tax Scams for 2014. 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 fraudulent 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 on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Department of Justice
FOR IMMEDIATE RELEASE
Monday, July 21, 2014
Justice Department Seeks To Shut Down Los Angeles Area Tax Return Preparer
Allegedly Overstated Deductions And Withholdings And Intercepted Clients' Tax Refunds
Updated April 6, 2015