FOR IMMEDIATE RELEASE|
THURSDAY, DECEMBER 11, 2008
TDD (202) 514-1888
JUSTICE DEPARTMENT, ALLEGING FRAUD EXCEEDING $7 MILLION, ASKS FEDERAL COURT TO BAR PENNSYLVANIA FAMILY FROM PREPARING TAX RETURNS FOR OTHERS
Coatesville, Pa. Tax Preparer, with Help from Husband and Mother,
Allegedly Fabricates Deductions for Customers
WASHINGTON - The United States has filed a lawsuit against a Coatesville, Pa., woman and two family members to bar them permanently from preparing federal income tax returns for others, the Justice Department announced today. The governments civil injunction suit alleges that Chalamar Muhammad, her husband Curtis Muhammad and her mother Doranna Muhammad prepared federal income tax returns for customers claiming fabricated deductions and credits.
The government complaint alleges that the Muhammads firm, CDC Tax Preparation and Financial Services, has a history of preparing hundreds of fraudulent returns annually and obstructing Internal Revenue Service (IRS) investigations of the fraud. The suit was filed in U.S. District Court for the Eastern District of Pennsylvania in Philadelphia.
Examples of bogus tax deductions mentioned in the governments court papers include false claims of contributions of thousands of dollars to churches and charities, and false claims of education credits. According to the complaint, Chalamar Muhammad allegedly tried to obstruct IRS audits of her customers returns by submitting documents that she fabricated to purportedly substantiate bogus deductions and credits.
According to the complaint, the IRS has identified more than $2.2 million in unreported tax liability on returns it has audited, and estimates that the total cost to the Treasury from the defendants misconduct may exceed $7 million. The complaint alleges that Chalamar Muhammad changed her businesss name and IRS electronic filing number frequently in order to stay a step ahead of the law.
The IRS and Justice Department take tax-preparer fraud seriously, said Nathan J. Hochman, Assistant Attorney General for the Justice Departments Tax Division. We are moving aggressively to use all appropriate law-enforcement tools to ensure that dishonest tax preparers are put out of business. Since 2001, the Justice Departments Tax Division has obtained injunctions against more than 365 tax return preparers and tax-fraud promoters.
More information about the Justice Departments Tax Division and its efforts to stop tax fraud promoters and preparers is available at www.usdoj.gov/tax.