Justice Department Seeks to Shut Down Dallas Area Licensor of Tax Preparation Businesses
The United States filed a complaint in the U.S. District Court for the Northern District of Texas on Dec. 12 seeking to bar a Dallas-area licensor of tax preparation businesses, and his business, from franchising or licensing the tax preparation business and from assisting in the preparing of federal income tax returns for others.
The complaint alleges that Kevin Murphy, through his tax preparation licensing business Umbrella Financial Services LLC, has had over one hundred licensees in a dozen states across the country. The complaint contends that some Umbrella Financial Services licensees have engaged in misconduct by preparing tax returns for customers, which report fictitious businesses, inflate business expenses for legitimate businesses, claim improper education credits, and report false income in order to claim inflated tax credits. The complaint also alleges that Umbrella Financial Services improperly shared Electronic Filing Identification Numbers and that some preparers associated with Umbrella Financial Services did not use a properly assigned Preparer Tax Identification Numbers.
The complaint also seeks an injunction against Ashley Fisher to bar her from preparing tax returns for others. As alleged in the complaint, Fisher is Umbrella Financial Services’ Chief Knowledge Officer and also owns an Umbrella-licensed tax preparation business.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information.