WASHINGTON – 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 Department announced.
According to the complaint, Brown prepared tax returns that falsely claimed business income, business expenses and education credits. For example, the complaint states that Brown prepared a tax return in 2011 that reported that the customer had a barber business with income of $9,673 and expenses of $124. The customer did not have a barber business in 2011, according to the complaint, and had no idea where Brown obtained such information. In another example listed in the complaint, Brown allegedly reported $4,000 in qualified education expenses on a customer's 2011 tax return. The complaint alleges that neither the customer nor her dependents attended college in 2011.
The complaint also alleges that for tax years 2010 and 2011, Brown failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the Earned Income Tax Credit on their customers' 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.
Department of Justice
FOR IMMEDIATE RELEASE
Friday, February 21, 2014
Justice Department Sues To Shut Down Detroit Tax Preparer
Woman Allegedly Fabricates Business Income, Business Expenses And Education Credits On Customer Returns
Updated April 6, 2015