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Friday, February 13, 2015

Ohio Federal Court Prohibits Tax Return Preparer from Engaging in Prohibited Conduct

A federal court in Dayton, Ohio, has entered a permanent injunction against a tax return preparer that requires him to sign tax returns and furnish his Preparer Tax Identification Number (PTIN) on returns he prepares, as well as retain a list or copy of each of the returns that he prepares, the Justice Department announced today.

The court also barred Rodger S. Thomas Sr. from preparing documents that he knows will result in an understatement of his customers’ tax liabilities.

According to the government’s complaint, from 2006 through 2009, Thomas is alleged to have prepared tax returns for customers that claimed false business deductions on their Schedule C (profit and loss from business) and fictitious deductions on their Schedule A (itemized deductions).  Also according to the suit, Thomas also allegedly prepared false Forms 1099 in order to inflate customers’ income and maximize their Earned Income Tax Credits.  The complaint alleged that Thomas would then report these payments on the Schedule C of his own income tax returns as expenses incurred by his business Ramjet Express.  The complaint further alleged that Thomas failed to sign or affix a PTIN to many of the returns that he prepared, negotiated refund checks by filing false Forms 1040 for customers and then, in violation of federal law, deposited the funds into his personal bank account. 

In 2012, Thomas pleaded guilty to one count of making a false statement on an income tax return and one count of aiding and assisting in the filing of a false income tax return.  He was subsequently sentenced to serve 24 months in prison and was released in March 2014.

The court’s order requires Thomas to contact and notify all persons for whom he has prepared a federal tax return or a claim for refund for since Jan. 1, 2006, of the injunction entered against him.

Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2015.  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 and tax scheme promoters.  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.      

Updated May 18, 2016