Justice Department Seeks to Shut Down Florida Tax Return Preparers and Owner of “Tax MD” Tax Preparation Business
Businesses Allegedly Prepare Fraudulent Tax Returns While Charging Customers Undisclosed, Unconscionable Fees
The United States filed a civil injunction suit seeking to bar Patrick Clarke of Hallandale Beach, Florida, and Ruby Rodriguez of Orlando, Florida, from owning, operating, or franchising a tax return preparation business and preparing tax returns for others, the Justice Department announced today.
The complaint also requests that the court order Clarke and Rodriguez to disgorge the fees that they obtained through the alleged fraudulent tax return preparation. According to the complaint, Clarke owns and operates Tax MD, a tax return preparation business with stores in Florida and North Carolina. Rodriguez allegedly manages one of Clarke’s stores located in Orlando.
According to the complaint, Clarke’s preparers, including Rodriguez, target primarily low to moderate income customers with misleading advertisements, prepare and file fraudulent tax returns to improperly increase their customers’ refunds and profit through unconscionable, exorbitant and often undisclosed fees—all at the expense of their customers and the U.S. Treasury.
The complaint alleges that Clarke’s preparers, including Rodriguez, engage in fraudulent activity, including:
- Falsely claiming the Earned Income Tax Credit;
- Claiming improper filing status (i.e. head of household for married individuals);
- Fabricating businesses and related business income and expenses;
- Fabricating Schedule A deductions, including for unreimbursed employee business expenses; and
- Charging deceptive and unconscionable fees
According to the complaint, Clarke was previously a franchisee of LBS Tax Services. This is one of 10 lawsuits that the Justice Department has filed in Florida against former LBS franchisees or related individuals, including Walner Gachette, Douglas Mesadieu, Jean Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Tonya Chambers, Jehoakim Victor, Lauri Rodriguez, Milot Odne, Christopher Lawrence and Kenneth Aikens.
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 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.