Tennessee Tax Return Preparer Incarcerated After Being Held in Civil Contempt for Violating a Federal Court Order
Court Ordered Jailing of Return Preparer for Failure to Obey Court Orders
Today, Kevin Williams, a former tax return preparer, voluntarily surrendered to the U.S. Marshal’s Service. On July 21, a federal district court in Memphis, Tennessee, issued the warrant for the arrest of Williams for his civil contempt in failing to follow the court’s earlier orders regarding his tax return preparation activities.
On April 4, the U.S. District Court for the District of Tennessee barred Williams, his wife, Stephanie Edmond, and their businesses, the Tax Firm and the Tax Factory, from preparing tax returns. At that time, the court also ordered Williams and Edmond to turn over to the United States all of the fees they received from preparing returns since Jan. 15. On July 21, the court determined that Williams not only failed to turn over the fees collected by the Tax Firm to the United States but instead spent funds on a down payment for a Lexus, gambling and new home furnishings. In addition to these expenditures, the court found that Williams continued to pay his return preparers, including his step-daughter to whom he gave more than $33,000. Based upon these findings, the court found Williams in civil contempt and ordered him to be incarcerated until he paid $25,000 to the United States.
In its July 21 order, the district court found Edmond in civil contempt but also determined that she currently lacked the financial resources to pay the United States. The court ordered that she be jailed if she failed to obtain employment within 90 days and begin to pay the government $25,000 in monthly installments of $500.
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’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.