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Friday, February 7, 2014

Justice Department Files Lawsuit to Stop Delaware Woman from Preparing Tax Returns

The Department of Justice filed a civil lawsuit in the federal court in Delaware today to enjoin Carmen J. Martinez and her business, CJM Bookkeeping and Taxes LLC, from preparing federal tax returns.  According to the complaint, Martinez and her business, which is located in Wilmington, Del., have prepared more than 7,800 tax returns since 2010.

The complaint, filed with the U.S. District Court for the District of Delaware, alleges that Martinez understates her customers’ federal tax liabilities by preparing returns that contain false deductions, including unqualified dependents, the Child Tax Credit, the Additional Child Tax Credit and tax rate benefits derived from improper filing status as Head of Household or Married Filing Jointly.  As a result, Martinez’s customers improperly received tax refunds of $5,000 each year on average.  The complaint alleges that Martinez’s activities between 2010 and 2013 have cost the U.S. Treasury as much as $25 million in lost income tax revenue.

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.

Related Materials:

United States v. Carmen J. Martinez, et al.
Complaint for Preliminary and Permanent Injunction

Press Release Number: 
Updated July 6, 2016