Justice Department Asks Federal Court to Shut Down Detroit Area Mother-Daughter Tax Return Preparers
The United States filed a complaint seeking to permanently bar a Detroit-area woman, her daughter, and the tax preparation businesses they operate from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction complaint against Denise Pope and Janise Jones, which was filed in the U.S. District Court of the Eastern District of Michigan, alleges that Pope and Jones prepare federal income tax returns for customers that understate their correct tax liabilities.
Denise Pope, also known as Denise Miller, operates CDP Tax Services Inc., CDP Accounting Service, PC, dba CDP Tax and Uneek Business Solutions — each of which was named as a defendant, according to the suit.
The government’s suit alleges that the understatements are the result of improper earned income tax credits, education credits, charitable deductions, unreimbursed employee business expense deductions and Schedule C (Profit or Loss From Business) expenses and income, which the defendants claim for their customers despite any supporting documentation. Because some of these credits are refundable, the improper claims often result in larger than appropriate tax refunds, according to the suit. The complaint alleges that the Internal Revenue Service (IRS) interviewed several of the defendants’ customers, who stated that the improper deductions, credits and Schedule C business expenses and income were not based on information they provided to the defendants.
According to the complaint, the IRS estimates that the defendants, using these business entities, have prepared more than 3,000 tax returns since 2011. The complaint alleges that the IRS has completed examinations of 87 of those returns, and the total tax deficiency for those returns alone exceeds $460,000. Based on the number of returns these defendants prepared, the complaint alleges that the harm to the U.S. Treasury far exceeds $460,000.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. 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 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.