Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
MONDAY, OCTOBER 3, 2011
WWW.USDOJ.GOV
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(202) 514-2007
TDD (202) 514-1888

JUSTICE DEPARTMENT SUES TO SHUT DOWN NEW JERSEY TAX PREPARER

Newark Man Allegedly Claimed Phony Dependents on Customers’ Tax Returns
           
WASHINGTON - The United States has filed a lawsuit seeking to stop Luvander Hollaway from preparing federal tax returns for others, the Justice Department announced today.  The civil injunction complaint alleges that Hollaway of Newark, N.J., fails to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on their customers’ returns.  According to the complaint, Hollaway also falsifies reported income and lists fake dependents on his customers’ returns in order to claim the maximum EITC for them.

For example, the complaint alleges that, on one customer’s tax return, Hollaway claimed three purported dependents: two grandchildren and a brother.  But according to the complaint, Hollaway knew that the listed individuals were not the customer’s grandchildren and that the customer had paid for other persons’ Social Security numbers to use in falsely claiming the supposed grandchildren as dependents.  The complaint also alleges that the person listed on the return as a brother was actually the customer’s fiancé, who could not be claimed as a dependent.

According to the complaint, the Internal Revenue Service (IRS) assessed penalties against Hollaway in 2006 for failing to comply with due-diligence requirements, and a follow-up IRS investigation in 2011 revealed continuing failures and fraudulent claims.  The government now seeks to bar Hollaway permanently from preparing federal tax returns for others.

The IRS listed return-preparer fraud as one of its “Dirty Dozen” tax scams for 2011.  In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters.  Information about these cases is available on the Justice Department website

Related Documents:

  United States v. Luvander Hollaway

Complaint for Permanent Injunction


(PDF documents)


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