Texas Woman Allegedly Prepares Tax Returns Claiming False Deductions and Credits

A Texas federal court permanently barred Melissa Alvarez, a tax preparer in McAllen, Texas, from preparing returns for others, the Justice Department announced today.  Alvarez agreed to the permanent ban, and the court entered an order imposing a permanent injunction against Alvarez on Oct. 27.

The order also requires Alvarez to turn over to the government a list of all customers for whom she prepared federal tax returns or claims for a refund for tax years 2011 through 2013, and to notify her customers for tax year 2013 of the permanent injunction against her.  The order authorizes the government to monitor Alvarez’s compliance with the terms of the order.

The complaint alleged that Alvarez prepared returns that contained false, improper or inflated deductions or tax credits, such as the earned income tax credit.  The complaint also alleged that these activities caused Alvarez’s customers to file returns which unlawfully understated income and tax liabilities and overstated refunds.

Return-preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2014.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent 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.