Justice Department Seeks to Shut Down Detroit-Area Tax Return Preparers
Preparers Allegedly Fabricate Businesses Losses, Claim Fraudulent Credits In Order to Understate Their Customers’ Tax or Overstate their Refunds
Tax R Us, a Detroit-area tax return preparation business, unlawfully understates its customers’ income tax liabilities and overstates refunds by making deliberate misstatements on the returns, according to a new civil lawsuit filed by the Justice Department today. The suit, filed in federal court in Detroit, asks the court to permanently bar Tax R Us, Vannak Long, Rosalind Warnock, Jasmine Jackson and Mary Jackson from preparing tax returns for others. The suit also asks the court to order each of them to turn over a list of all of the tax returns they have prepared.
According to the complaint, Long, the owner of Tax R Us, frequently understated his customers’ gross receipts and overstated their business deductions to minimize their income subject to tax. The complaint also alleges that Warnock, a past Tax R Us preparer, and current Tax R Us preparers Jasmine Jackson and Mary Jackson prepared returns that fabricate self-employment businesses and business losses to offset their customers’ taxable income from other sources and to increase their customers’ Earned Income Tax Credit. In addition to this improper conduct, Warnock, Jasmine Jackson and Mary Jackson claimed education credits the customers are not entitled to receive, according to the complaint.
In the complaint, the government states that Warnock, Jasmine Jackson and Mary Jackson pleaded guilty to charges of preparing false tax returns. Jasmine Jackson was sentenced in August. Mary Jackson and Warnock are awaiting sentencing. According to the complaint, Long, Warnock, Jasmine Jackson and Mary Jackson’s fraudulent tax preparation caused more than $3 million of harm to the United States. The government alleges that Tax R Us has had many locations throughout the Detroit-area including: 7635 E. 8 Mile Road, Warren; 16900 E. Warren Street, Detroit; 6900 East 7 Mile Road, Detroit; 3157 Woodward Avenue, Detroit; 21234 Van Dyke Avenue, Warren; 14621 W 8 Mile Road, Detroit; and 143 South Telegraph Road, Pontiac.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their 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. 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.