Justice Department Seeks to Shut Down Florida and North Carolina Tax Return Preparers
Owners of Q A Tax Service, Unik Tax Refund, D&M Tax Solutions, LED Tax Services, and UJM Tax Services Allegedly Fabricate Deductions and Falsely Claim Credits on Their Customers’ Tax Returns
The owners and operators of the tax return preparation businesses Q A Tax Service Inc., Unik Tax Refund, D&M Tax Solutions, LED Tax Services, and UJM Tax Services prepare false tax returns, according to three separate civil suits filed by the United States. The government seeks court orders barring the owners and operators of these businesses from preparing tax returns for others and owning and operating a tax return preparation business. The government also requests court orders requiring these owners and operators to disgorge the gross receipts they obtained from the preparation of federal tax returns that make, among other things, false claims.
The government filed the first of these three suits, in federal court in Orlando, Florida, against two of the owners and operators of Q A Tax Service Inc., Vicky Barwick of Orlando, Florida and Jasmine Morales of Winter Garden, Florida. According to that complaint, Q A Tax Service Inc. has store locations in Florida, Illinois, Indiana, and North Carolina. The government filed the second of these suits, in federal court in Fayetteville, North Carolina, against another owner and operator of Q A Tax Service Inc., Tanisha Salmon of Fayetteville.
The government filed the third suit, in federal court in Orlando, Florida, against the owners and operators of the following tax return preparation businesses, each of which has locations in Florida:
- Unik Tax Refund LLC – Yves Demesmin of Mt. Dora, Florida;
- UJM Tax Services LLC – Joseph Demesmin of Boca Raton, Florida;
- LED Tax Services – Elie Dorceus of Boynton Beach, Florida; and
- D&M Tax Solutions – Mario Cooper and Dia Fleming of Palm Coast, Florida.
In these complaints, the government alleges that Barwick, Morales, Salmon, Yves Demesmin, Joseph Demesmin, Dorceus, Cooper, and Fleming (the defendants) each use, in their respective businesses, a model previously used by the tax return preparation business formerly known as LBS Tax Services. Since 2014, the United States has sued nearly a dozen former LBS franchisees and managers and obtained court orders requiring these individuals to disgorge millions of dollars in fees, in addition to barring these individuals from owning and operating a tax return preparation business and from preparing tax returns for others.
The government alleges in its complaints that the defendants used the LBS model to prepare and file false tax returns to fraudulently increase their customers’ refunds and profit through exorbitant and often undisclosed fees—all at the expense of their customers and the U.S. Treasury. Specifically, the complaints allege that the defendants engage in fraudulent activity, including:
- Falsely claiming the Earned Income Tax Credit;
- Fabricating businesses and related business income and expenses;
- Fabricating deductions, particularly for unreimbursed employee business expenses; and
- Charging deceptive and unconscionable fees.
The Internal Revenue Service (IRS) is reminding taxpayers that the 2017 individual income tax return filing season begins Jan. 23, and there is information available on the IRS’s website. Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2016 and taxpayers seeking a return preparer should remain vigilant. 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.