Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
FRIDAY, FEBRUARY 27, 2004
WWW.USDOJ.GOV
TAX
(202) 514-2008
TDD (202) 514-1888

GEORGIA FEDERAL COURT BARS MULTI-STATE “REPARATIONS” TAX SCAM

Illegal Scheme Promoted to African-Americans in Their Churches

WASHINGTON, D.C. - WASHINGTON, D.C. - The Justice Department today announced that a federal court has permanently barred Morris James Sr. and his company, the National Resource Information Center, Inc., from promoting a multi-state reparations tax scam. The permanent injunction order, signed by Judge Duross Fitzpatrick of the U.S. District Court for the Middle District of Georgia, in Macon, also bars James and his company from preparing federal income tax returns for others.

The court found that James engaged in illegal conduct by promoting his reparations tax scam, and in preparing federal income tax returns based on the scam, because there “is no ‘black heritage’ tax credit, no credit for ‘the black tax rebellion’ nor a credit for ‘40 acres and a mule.’”

“The Justice Department is committed to stopping the promotion of tax scams, including those based on imaginary tax credits,” said Eileen J. O’Connor, Assistant Attorney General for the Tax Division of the Department of Justice. “Unscrupulous promoters who sell these fraudulent schemes face substantial penalties for their actions.”

The order entered was in response to a civil suit filed by the Justice Department alleging that James, of Montezuma, Georgia, and numerous employees of his company promoted false claims for tax credits or refunds based on a reparations scam. According to papers filed in the case, James promoted the bogus reparations credit at meetings held in churches throughout the United States, and prepared federal income tax returns for more than 6,300 customers seeking refunds of $43,209 per return based on the on fraudulent credit. The Internal Revenue Service prevented more than $900 million in losses to the U.S. Treasury by identifying and disallowing these fraudulent refund claims.

A grand jury in the Northern District of Mississippi indicted James and an associate, Parthenia Hines, on criminal charges relating to their promotion of the fraudulent tax credit. Their criminal trial is scheduled to begin April 5, 2004, in Oxford, Mississippi.

Efforts by the IRS and Justice Department to shut down tax scams based on reparations and similar claims have resulted in a 97% drop in these claims in recent years, according to testimony before the Senate Finance Committee in April of 2003 by Dale Hart, Commissioner of the IRS’s Small Business-Self Employed Division.

Jennifer Brown, a trial attorney in the Justice Department's Tax Division, represented the United States in this case. More information on the case is available at http://www.usdoj.gov/tax/prtax/txdv03223.htm and http://www.usdoj.gov/tax/prtax/txdv03354.htm.

The Justice Department has recently obtained injunctions against a number of tax-scam promoters. More information about these cases is available on the Justice Department website at http://www.usdoj.gov/tax/TEN.htm and http://www.usdoj.gov/tax/taxpress2004.htm.

Related Documents:

  United States v.
  Morris James Sr.

Order and Judgement

(PDF documents)


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