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Thursday, July 3, 2014

Court Prohibits Mississippi Tax Preparer from Preparing Tax Returns for Others

Tax Preparer Allegedly Filed Tax Returns for Customers Without Substantiating Claimed Refundable Credits

A federal court has permanently barred Kavivah Branson, aka Kavivah Bradley, of Clinton, Mississippi, and her Jackson, Mississippi, business, Branson Tax Service, from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Branson consented, was signed by Judge Tom S. Lee of the U.S. District Court for the Southern District of Mississippi.

According to the complaint, Branson prepared federal income tax returns for customers that understated the tax actually due. The complaint also alleged that Branson claimed improper earned income tax credits and education credits for her customers without performing the required due diligence and despite the absence of any supporting documentation, leading to the understatements. These unsubstantiated credits often resulted in overstated refunds because the credits claimed on the returns were refundable. Consequently, even taxpayers who report no federal tax liability could have received a refund up to the amount of the refundable credit claimed.

According to the complaint, over 99 percent of the 2,401 returns Branson has prepared since Jan. 1, 2009, sought a refund, and 97 percent of the 287 returns the IRS audited to date understated the customer’s tax liability by an average of $5,006. Given the number of returns Branson has prepared since 2009, the harm to the U.S. Treasury caused by her practices could be in the millions of dollars.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Kavivah Branson, etc.
Order Entering Permanent Injunction

Press Release Number: 
Updated July 7, 2016