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Tuesday, September 8, 2009

Federal Court Shuts Down California Tax Preparer

Placerville, Calif. Woman Claimed Over $26 Million in Fraudulent Tax Refund Requests for Customers

WASHINGTON — A federal judge in Sacramento, Calif., has barred Placerville, Calif.-based Teresa Marty and her business, Advanced Financial Services, LLC, from acting as a federal tax return preparer, the Justice Department announced today. U.S. District Court Judge Frank C. Damrell, Jr., of the Eastern District of California entered the preliminary injunction order, which adopted an earlier recommendation of U.S. Magistrate Judge Edmund F. Brennan.

The court found that in 2008 and 2009 Marty prepared and filed fraudulent tax returns with fabricated amounts of federal taxes withheld. According to the court, this false reporting of tax withholding led to fraudulent refund claims in amounts as large as $2.7 million per customer. The court also found that to support those fraudulent refund claims, Marty prepared and filed false IRS1099 forms.

The court stated that the IRS had identified approximately 110 returns that Marty prepared and filed that use false 1099 forms to generate fraudulent refund claims. The court also noted that the scheme Marty employed appeared to be part of a growing trend among tax protesters to file frivolous tax returns and 1099 forms in an attempt to escape their federal tax obligations and to fraudulently obtain money from the U.S. Treasury.

In addition to barring Marty from preparing federal tax returns, the court ordered her to provide to the United States a complete customer list and to notify her customers of the court’s order. More information about the case is available in an earlier Justice Department press release.

In the past decade the Justice Department has obtained injunctions against more than 420 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.

Press Release Number: 
Updated September 15, 2014