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Friday, February 1, 2013

Federal Court Bars Kansas Instant Tax Service Franchisee from Operating and Preparing Tax Returns,Orders Payment of $100,000 in Penalties

A Kansas City, Kan., federal court permanently barred an Instant Tax Service franchisee, A&S Tax Services LLC, from further operating or preparing federal tax returns for others, the Justice Department announced today. Instant Tax Service is a national tax-preparation chain operated by ITS Financial LLC, based in Dayton, Ohio. An Ohio federal court entered a preliminary injunction against ITS Financial LLC and its owner last November.

In the Kansas case, the owner of A&S Tax Services, Semere Tsehaye of St. Louis was also permanently enjoined from engaging in certain abusive practices. Both A&S Tax Services and Tsehaye consented to the civil injunction order without admitting the allegations against them. The order, signed by Judge John W. Lungstrum of the U.S. District Court for the District of Kansas, also provides that A&S Tax Services will pay $100,000 in civil tax penalties.

According to the government complaint , the defendants operated Instant Tax Service offices at multiple locations in the Kansas City metropolitan area. The defendants allegedly instructed A&S Tax Services employees at Instant Tax Service offices to engage in systemic and pervasive tax fraud, including routinely preparing tax forms falsely claiming education and dependent-care credits, reporting items pertaining to phony companies, and reporting fictitious income and expenses in order to fraudulently inflate the Earned Income Tax Credit.

Last year, Judge Lungstrum permanently enjoined Tsehaye’s brother, Ahferom Goitom, from preparing federal tax returns.

In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department’s website .

Related Materials:

United States v. Semere Tsehaye, et al.
Stipulated Order for Permanent Injunction Other Relief Against Semere Tsehaye and A & S Tax Services, LLC


Press Release Number: 
Updated June 3, 2016