Federal Court Bars Tennessee Tax Preparer
A federal court has barred a Nashville-area tax return preparer from preparing returns for others, the Justice Department announced today. The court’s injunction forbids LaVergne, Tennessee, resident Michelle Cole Theus, aka Michelle Cole, and Cole Tax Services from preparing federal tax returns or operating a return-preparation business. It also requires Theus to turn over a complete list of her customers to the government. Theus agreed to entry of the injunction without admitting or denying the factual allegations in the United States’ civil complaint.
According to the United States’ civil complaint in the case, Theus initially prepared accurate returns for her customers, then fraudulently increased the returns’ claimed refund—for example, by adding fictitious dependents or false education credits. Theus then caused the fraudulently inflated portion of the refund, or sometimes the entire refund, to be deposited to her own bank account, the complaint alleges. The Internal Revenue Service (IRS) estimates that Theus has claimed at least $788,220 in fraudulent refunds, according to the complaint.
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 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.