FOR IMMEDIATE RELEASE|
THURSDAY, NOVEMBER 1, 2007
TDD (202) 514-1888
ILLINOIS FEDERAL COURT PERMANENTLY BARS EAST ST. LOUIS WOMAN FROM PREPARING TAX RETURNS
Estimated Tax Losses From Tax Preparer’s Misconduct Is $2.9 million
WASHINGTON. – A federal court has permanently barred Mary Lee Powell of East St. Louis, Ill., from preparing federal tax returns for others, the Justice Department announced today. Judge Michael J. Reagan of the U.S. District Court for the Southern District of Illinois signed the civil injunction order.
According to the court order, the Internal Revenue Service (IRS) examined 109 returns that Powell prepared and determined that all of them understated her customers’ tax liabilities. The court found that the estimated total tax loss from Powell’s misconduct from 2003 to 2006 was $2.9 million. Powell encouraged and assisted her customers in applying for Refund Anticipation Loans (RALs) through HSBC Bank USA and HSBC Taxpayer Financial Services. The RALs are accelerated refunds from which Powell’s preparation fees and bank finance charges are automatically deducted.
The court held that Powell prepared returns with fabricated business-expense deductions, improper education tax credits, and with deductions for improperly claimed dependents. According to the court, Powell fabricated over $10,000 in business expenses on the tax returns of a customer who was a police officer with the St. Clair County Sheriff’s department.
Powell was ordered to give the government a list of her customers’ names, addresses, e-mail addresses, phone numbers and Social Security numbers and to notify her customers of the injunction. More information about the case is available at http://www.usdoj.gov/tax/txdv07484.htm.
Since 2001 the Justice Department’s Tax Division has obtained more than 285 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these efforts can be found at http://www.usdoj.gov/tax/taxpress2007.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax/index.html.