Justice Department Files Lawsuit to Permanently Bar Kentucky Man from Preparing Tax Returns
The United States filed a complaint to permanently bar a Louisville, Kentucky, man and his business, NJ Mobile Tax Service, LLC, from preparing federal income tax returns for others, the Justice Department announced today.
According to the complaint, which was filed in the U.S. District Court of the Western District of Kentucky, Napoleon L. Jackson has prepared federal income tax returns that improperly understated his customers’ income tax liabilities. According to the suit, in a flyer for NJ Mobile, Jackson, offers to travel to his customers’ homes and prepare their tax returns. The flyer invites potential customers to “Let me do the numbers & I’ll even come to you,” and boasts that “[Jackson] can increase your chances for a higher return.”
The complaint alleges that Jackson understated his customers’ federal tax liabilities by, among other things:
Falsely claiming deductions related to home ownership for taxpayers that did not own homes, including cases where Jackson prepared and filed returns from customers’ rental homes;
Falsely claiming dependents, including listing Jackson’s relatives, as dependents on a customer’s tax return;
Fabricating charitable contributions, and offering to falsify letters from a church that indicated the customers contributed $5,500 in cash to the church that the customers had not in fact donated; and
Falsely claiming education credits for taxpayers who were not entitled to them.
The Internal Revenue Service (IRS) audited 31 tax returns that Jackson prepared on behalf of 20 customers for tax years 2010 and 2011. An examination of these 31 returns resulted in an increase in taxes owed for every return, according to the suit. The complaint further alleges that Jackson prepared at least 162 returns from 2010 to 2011, and continues to prepare returns today. Overall, the suit alleges that Jackson’s conduct may have cost the U.S. Treasury more than $800,000.
Return preparer fraud is one of the IRS’s 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 here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.