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Federal Court Bars Los Angeles Man from Promoting Tax Scams
and Preparing Tax Returns for Others

WASHINGTON—The Justice Department announced today that a federal court has barred James L. Tolbert of Los Angeles, also known as James Tolbert Bey, from preparing federal income tax returns for others. Judge R. Gary Klausner of the U.S. District Court for the Central District of California permanently enjoined Tolbert and anyone acting in concert with him on Sept. 6, 2006, from promoting a tax scheme by representing, among other things, that residents of California or other states are not liable for federal income tax because they are “citizens of California (or another state. . .) and not of the United States,” or that “American citizens working in the United States need not file federal income returns because ‘compensation for labor’ is totally different in meaning and in law from ‘income.’” Federal courts across the country have rejected such claims repeatedly.

According to the government’s complaint in this case, the IRS audited 66 of the 210 returns that Tolbert prepared during the period from 1999 to 2002 and found that Tolbert understated those customers' tax liabilities by more than $951,000. The complaint further states that the IRS estimates that Tolbert's tax understatements for all his customers totaled as much as $2.1 million.

The court also ordered Tolbert to give the Justice Department a list of his customers’ names, addresses, e-mail addresses, telephone numbers, and Social Security numbers. More information about the case is available at

Since 2001, the Justice Department has obtained injunctions against more than 200 tax-return preparers and tax fraud promoters. Information about these cases is available on the Justice Department Web site at More information about the Justice Department’s Tax Division can be found at