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Justice Department Seeks to Bar Illinois Tax Preparer from Preparing Federal Tax Returns for Others

Complaint Alleges that Tax Preparer Inflated Deductions for Customers

WASHINGTON – The United States today sued Irma Melendez, a Mundelein, Ill., tax return preparer, to stop her from preparing federal tax returns for others, the Justice Department announced. The government alleges that Melendez, who operated a business called “Income Tax Service,” prepared federal income tax returns claiming inflated deductions for her customers.

According to the complaint, Melendez prepared over 2200 returns from 2002-2005. The complaint states that based on the examination of 224 returns, the Internal Revenue Service (IRS) determined that Melendez inflated employee business expenses, including falsifying business mileage, meals and uniforms as business expenses and inflated improvements to rental properties.

"This case demonstrates the government's two-pronged attacks on fraudulent tax preparers -- criminal prosecution to put them in prison for their misdeeds and civil injunctions to prevent them from preparing tax returns in the future,” said Nathan J. Hochman, Assistant Attorney General of the Tax Division. “Dishonest tax preparers should know that if they help people cheat the tax system, the consequences to them will be severe."

According to court documents, Melendez has a history of violating the tax laws. She has been indicted on twenty-six counts of knowingly aiding and assisting in the preparation of false and fraudulent tax returns; and on May 11, 2007, she pleaded guilty to one count of the indictment. She is currently serving a fifteen-month sentence at the federal penitentiary in Bruceton Mills, W.Va.