FOR IMMEDIATE RELEASE|
FRIDAY, OCTOBER 9, 2009
TDD (202) 514-1888
JUSTICE DEPARTMENT SUES TO BAR KANSAS MAN FROM PREPARING TAX RETURNS
Kansas City Man Allegedly Understates Income and Fabricates Deductions,
Costing U.S. Treasury Millions in Lost Revenue
WASHINGTON – The United States has asked a federal court in Kansas City, Kan., to bar Carlos Cruz, aka Carlos Ruano-Cruz, from preparing tax returns for others, the Justice Department announced today. According to the government complaint, Cruz’s business, Carlos Income Tax Services, prepares federal income tax returns for customers in the Kansas City metropolitan area that unlawfully understate income tax liabilities by under-reporting income, inflating business expenses and claiming improper deductions for nondeductible personal expenses.
The government complaint accuses Cruz of providing false advice regarding the deductibility of personal and business expenses, and unlawfully advising customers to fabricate business income in order to maximize tax refunds. According to the complaint, the Internal Revenue Service has audited at least 81 returns prepared by Cruz and found that 95 percent of those examined required adjustments to the federal income taxes owed. The complaint estimates that the tax losses from Cruz’s alleged misconduct between 2003 and 2007 could exceed $25 million.
In the past decade, the Justice Department has obtained injunctions against more than 425 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department’s Tax Division Web site.