WASHINGTON — The Justice Department announced today that it filed suit in federal court in Phoenix to permanently bar Jeffrey R. Hunn, of Snowflake, Ariz., from preparing federal tax returns for others. According to the government complaint, Hunn prepares fraudulent returns on which he fails to report his customers’ wages. The Justice Department also seeks a court order requiring Hunn to provide the government with his customers’ names, addresses, Social Security numbers, telephone numbers, and e-mail addresses. The case will be heard in Prescott, Ariz.
The suit alleges that Hunn submits Form 4852 (Substitute for Form W-2, Wage & Tax Statement) containing false information with the returns he files in an attempt to replace his customers’ correct W-2 and 1099 forms. On these forms, the complaint states, Hunn falsely claims that his customer received no wages. He then reports on the customer’s return either no income or significantly less income than the customer actually had. According to the government, Hunn also claims refunds on these returns of all the federal taxes withheld from his customers’ wages.
“People who prepare fraudulent tax returns expose themselves and their customers to the risk of civil penalties and criminal prosecution,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Justice Department and the Internal Revenue Service are cracking down on tax preparers who file fraudulent returns.”
"We've seen more activity involving filing false W-2 and 1099 forms, which is why this scheme reached the top of this year's 'Dirty Dozen' tax scams," said Mark E. Matthews, IRS Deputy Commissioner for Services and Enforcement. "We remind taxpayers that getting caught up in tax scams can lead to big headaches."
The government’s suit alleges that Hunn is following a scheme promoted by Peter Hendrickson of Commerce Township, Mich. Claiming that only government workers are subject to tax withholding, Hendrickson allegedly tells people to not submit their W-2 and 1099 forms with their tax returns, and in their place submit substitute or “corrected” W-2 and 1099 forms changing their reported income to zero. The government recently sued Hendrickson and several of his followers to recover erroneous refunds they allegedly received after filing returns similar to Hunn’s. More about those suits can be found at http://www.usdoj.gov/tax/txdv06219.htm.
Fraudulent returns with false W-2 and 1099 forms are first on the IRS’s 2006 list of the “Dirty Dozen” tax scams posted at www.irs.gov/newsroom/article/0,,id=154293,00.html.
More information about the Justice Department’s efforts to stop tax scams can be found at www.usdoj.gov/tax/taxpress2006.htm. Information about the Justice Department’s Tax Division can be found at www.usdoj.gov/tax.