Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
THURSDAY, APRIL 14, 2005
WWW.USDOJ.GOV
TAX
(202) 514-2007
TDD (202) 514-1888

JUSTICE DEPARTMENT SUES TO BAR HAWAII WOMAN’S ALLEGED TAX SCAM TARGETED AT MILITARY PERSONNEL

Return Preparer Allegedly Tells Customers They Can Deduct Expenses of Haircuts, Cell Phones, and Other Personal Items


WASHINGTON, D.C. - The Justice Department announced today that is has asked a federal court to bar Lou Ann Moser and Carla Newman of Hawaii from promoting an allegedly fraudulent tax scheme targeted at military personnel and from preparing tax returns for others. In the complaint, filed Wednesday in Honolulu, the government also seeks an order directing the defendants to provide the government their customers’ names, mail and e-mail addresses, and Social Security and telephone numbers. The government alleges that Moser and Newman operate their tax preparation service in Kailua, Hawaii.

According to the complaint, Moser falsely advises military customers that they can claim tax deductions for non-deductible personal expenses such as haircuts, cell-phone and Internet services, and other personal items and services. Moser allegedly advises and helps non-military customers to use sham corporations to improperly claim deductions for non-deductible personal expenses. Newman allegedly assists Moser and allegedly electronically files returns for customers falsely stating that the customers had prepared them when in fact Moser prepared them. The government alleges that the defendants have prepared and filed hundreds of returns for customers, and estimates that the defendants’ conduct cost the federal treasury more than $4 million for tax year 2003 alone.

“The Department of Justice and the Internal Revenue Service (IRS) are working methodically to halt tax fraud scams and the preparation and filing of fraudulent income tax returns,@ said Eileen J. O=Connor, Assistant Attorney General for the Tax Division. “People who prepare returns claiming false deductions are cheating honest taxpayers and creating legal problems for their customers.”

The complaint further alleges that Moser advised customers to lie to IRS agents to obstruct investigations. Moser allegedly told one customer to delay an IRS audit until her husband was deployed to Afghanistan, and then falsely tell the IRS that the husband had receipts needed to substantiate tax deductions.

This suit is part of an ongoing Justice Department and IRS initiative to stop the promotion of tax schemes and scams, and the preparation and filing of fraudulent tax returns. More information about this case and other tax injunction cases can be found at http://www.usdoj.gov/tax/taxpress2005.htm. More information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax/index.html.

Related Documents:

  United States v.
  Lou Ann P. Moser
  et al.

Complaint for Permanent Injunction and Other Relief; Summons

(PDF document)


Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader


Accessibility Information

 

 

###

05-191