Florida Federal Court Permanently Shuts Down Tax Return Preparers

A federal court in West Palm Beach, Florida, has permanently barred defendants Fred Pickett Jr., Jalisa Steele, and Fred Pickett III, as well as Five Star Tax Agency LLC, Five Star Financial Services Inc., and Millenium Tax Professionals Inc. from owning, operating, or franchising a tax return preparation business and preparing tax returns for others.  The defendants consented to the order, which also requires them to provide the government with a list identifying their tax preparation customers.

According to the complaint, Pickett Jr., with the assistance of Steele and Pickett III, created and maintained a tax return preparation business operating under Five Star Tax Agency LLC, Five Star Financial Services Inc., or Millenium Tax Professionals Inc. that prepared tax returns for their customers which understated tax liabilities and claimed bogus refunds.  Their alleged scheme involved unlawfully (i) fabricating businesses and business-related profits or losses, (ii) manipulating, maximizing, or falsely claiming the Earned Income Tax Credit, (iii) claiming false education credits, (iv) claiming spurious fuel tax credits, (v) fabricating retirement account contributions and deductions, and (vi) failing to provide customers with complete copies of their tax returns.  In August, the Court denied a motion to dismiss filed by the defendants and held that the allegations in the complaint “connect each defendant to a tax return preparation scheme that violates §§ 6694 and 6695 [of the Internal Revenue Code].” 

Return preparer fraud is one of the Internal Revenue Service (IRS)’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant.  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.