Federal Court Permanently Bars Maryland Tax Preparer from Preparing Federal Tax Returns
The U.S. District Court for the District of Maryland has permanently barred Lateisha Kone aka Vanessa Dickens of Baltimore, Maryland, from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction order prohibits Kone from acting as a federal tax return preparer and from owning, operating, or profiting from a tax-return preparation business. Kone agreed to the entry of the injunction but did not admit the allegations in the civil complaint against her.
According to the complaint, Kone owned and operated six Liberty Tax Service franchise stores in Baltimore. Kone and her employees allegedly prepared federal income tax returns that, among other things, contained bogus Schedules C (Profit or Loss from Business) and intentionally omitted Form W-2 (Wage and Tax Statement) income and Social Security Income. These fraudulent returns improperly generated federal income tax refunds and tax credits, such as the Earned Income Tax Credit, for Kone’s clients, according to the complaint.
The government alleges that Kone and her employees filed 1,222 returns that reported fictitious household help income (HSH Income). Many of the returns allegedly reported substantially the same amount of HSH income, which generated fraudulent Earned Income Tax Credits and federal tax refunds. Kone then kept each refund as a preparation fee while the customers only received a $50 cash payment as part of the Liberty Tax “Cash-In-A-Flash” promotion, according to the complaint.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. 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.