Court Shuts Down Dallas Tax Return Preparer
A Dallas-area tax return preparer continually and repeatedly prepared federal income tax returns that contained false or inflated deductions and credits, according to a 2015 lawsuit filed by the Justice Department. Now a federal court has permanently barred the defendants in that case from preparing federal tax returns for others.
According to the 2015 complaint, Allan Ukiru Kadagi, Akay Tax Services, Akay Express Tax Services, Akay Express Tax Services Inc. and Cleanshine Tax Services prepared returns for their customers that claimed false, improper, or inflated business expense deductions and false, improper, or inflated education expenses and credits. As a result, their customers repeatedly reported and paid less tax than they owed, according to the complaint. The returns also claimed the earned income tax credit beyond what the customers were eligible to receive, the complaint alleged. The complaint further alleges that Kadagi and the companies misused Preparer Tax Identification Numbers and Kadagi did not provide true copies of tax returns filed with the Internal Revenue Service (IRS) to his clients.
The court order requires the defendants to turn over to the United States a list of all persons for whom they prepared federal tax returns since Jan. 1, 2014. It also authorizes the United States to monitor the defendants’ compliance with the terms of the injunction.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. 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’s 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.