Justice Department Asks Federal Court to Shut Down Fraudulent Florida Tax Return Preparer
The United States has filed a complaint seeking to permanently bar a West Palm Beach, Florida, area man and his business from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction complaint against Paul Jean, which was filed in the U.S. District Court for the Southern District of Florida, alleges that Jean prepares federal income tax returns for customers that understate their correct tax liabilities. The complaint alleges that Jean has operated under the business names Whiz Tax and Rejoice Tax Services.
According to the complaint, Jean intentionally misreports the information he receives from customers in order to fabricate or inflate tax credits, including claiming improper earned income tax credits, education credits or fuel credits. Because some of these credits are refundable, the improper claims often result in larger tax refunds than the customer would otherwise be entitled to, according to the suit.
The complaint alleges that Jean also prepares returns that report false or inflated deductions, such as mortgage interest deduction or contributions to charity, or business expense deductions reported on a Schedule C (Profit or Loss From Business), such as expenditures for supplies or office expenses.
According to the suit, the Internal Revenue Service (IRS) interviewed several of Jean’s customers who stated that they had not provided Jean with information to support a claim for a credit and that they were not aware that the improper credit was claimed on their tax return.
The suit also alleges that in some instances, Jean has prepared two returns for one customer. One return is shown to the customer but is not filed with the IRS, while the other return is filed with the IRS but not shown to the customer. The filed return claims a larger refund than the return shown to the customer by using at least one of the schemes described. Jean then allegedly keeps the fraudulent excess refund reported on the filed return.
The IRS estimates that Jean, directly or indirectly, has prepared and filed more than 3,000 tax returns since 2012, and that Jean’s conduct has potentially caused millions of dollars of harm to the U.S. Treasury, according to the complaint.
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.