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Monday, April 15, 2013

Justice Department Sues to StopSouth Carolina Tax Return Preparers

Return Preparers in Charleston and Columbia Allegedly Overstate Refunds through Fabricated and Inflated Deductions and Credits

The United States has asked a federal court in Charleston, S.C., to permanently bar Stacy Middleton of Charleston, and George Jenkins of Blythewood, S.C., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Middleton and Jenkins have prepared federal income tax returns in Charleston and Columbia, S.C., through a business named MBM Tax and Accounting Services LLC. 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 Middleton and Jenkins prepared returns that unlawfully created fictitious deductions and credits as well as overstating and duplicating existing deductions and credits. The complaint also alleges that Middleton created fraudulent Forms 1099 on behalf of customers, creating fake income to enable Middleton to claim the Earned Income Tax Credit on behalf of those customers. According to the complaint, the Internal Revenue Service has examined 842 returns prepared by Middleton and Jenkins, and over 93 percent of those examinations resulted in an adjustment to their client’s tax liability. Altogether, the government complaint alleges that Middleton’s and Jenkins’s activities may have resulted in as much as $55 million 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’s website.

United States v. StacyMiddleton , etc.
Complaint for Permanent Injunction (PDF)

Press Release Number: 
Updated June 6, 2016