Justice Department Files Lawsuit to Shut Down Chicago Tax Preparation Business
Co-Owner Allegedly Claims Tax Deductions for Fake Expenses on Customer Returns
The United States has sued The Tax Helper Corp, a tax preparation business with a store located in Chicago, and seeks to permanently bar the company and its alleged co-owner, Johnnie Pernell Jr., from preparing federal tax returns for others, the Justice Department announced today.
According to the complaint, Pernell Jr. prepared tax returns that falsely claimed deductions for fake business expenses and phony education expenses. One example described in the complaint details how Pernell Jr. allegedly prepared a tax return that improperly claimed a fake electrical business for one customer – reporting no income from the electrical business, but more than $24,000 in bogus losses. The customer, according to the complaint, informed the Internal Revenue Service (IRS) that he did not own an electrical business, had not provided any documents to Pernell Jr. to support the expenses that were claimed and had no idea how Pernell Jr. had determined the amount of expenses reported on his return.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013. The IRS has some tips on their website for choosing a tax preparer. 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.