Justice Department Sues to Stop South Carolina Tax Return Preparers Engaged in Earned Income Credit Scheme
Return Preparers in South Carolina Prepared Returns Allegedly Overstating Refunds through Fabricated and Inflated Deductions and Earned Income Credit Scheme
The United States has asked a federal court in Florence, S.C., to permanently bar Susann Allen of Darlington County, S.C., and Rachel D. Watson of Florence County, S.C., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Allen and Watson have prepared federal income tax returns at a number of businesses in South Carolina including, most recently, Fludd’s Express Tax Service and Gold Valley Pawn. The complaint alleges that they have prepared returns that unlawfully understate income tax liabilities and overstate refunds through a variety of schemes.
The government complaint alleges that Allen and Watson prepared returns that unlawfully claim the Earned Income Tax Credit by reporting fictitious Schedule C businesses or business income or fictitious dependents. The complaint also alleges that Allen and Watson fabricated or inflated deductions. According to the complaint, the Internal Revenue Service has examined 32 returns prepared by Watson and six prepared by Allen and found that every single one overstated their client’s refund. The total excessive refund of those returns is alleged to be greater than $100,000. Altogether, the government complaint alleges that Allen’s and Watson’s activities may have resulted in millions of dollars of loss to the United States.
Over the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department website.
United States v. Susann Allen, et al.