Justice Department Seeks To Shut Down Arizona Tax Preparers
Family Of Tax Preparers Sought Exorbitant Refunds On Fraudulent Tax Returns
WASHINGTON - The United States has asked a federal court to permanently bar a family of tax preparers in Overgaard, Ariz., from preparing federal tax returns for customers, the Justice Department announced today. The suit, filed in U.S. District Court in Phoenix, alleges that husband and wife, Deane and Shelia Young, and Shelia Young's father, Kennith Defoor, promoted fraudulent tax schemes through their companies, Accurate Consulting, LLC; and D4 Accounting, Consulting, Tax Services, Inc. This family of tax preparers promotes fraudulent schemes that manipulate the amount of income and federal tax withholdings claimed on their customers' tax returns, resulting in bogus claims for tax refunds.
According to the complaint, the Youngs and Defoor prepared at least 337 federal tax returns since 2001 that have requested a fraudulent refund, often in amounts exceeding $100,000. It is alleged that the tax preparers has prepared frivolous tax returns that cumulatively claim over $24 million in fraudulent refunds, and have resulted in the Internal Revenue Service's (IRS) issuance of approximately $2.3 million in erroneous refunds. The government alleges that the Youngs and Defoor assert the fraudulent "zero-income" and "commercial redemption" tax schemes, and often submit false IRS forms on behalf of their clients to report both fictitious interest income and tax withholdings.
As frequently seen in affinity scams, according to the complaint, the family of tax preparers uses their leadership positions within Grace Fellowship Church of Heber, Ariz. to promote their business and peddle their fraudulent tax schemes. The complaint alleges that they have prepared and filed tax returns that assert false and frivolous tax arguments for many of the church's members, including the church's senior pastors. According to the complaint, they have similarly infected the local law enforcement community with their fraudulent tax schemes, having prepared and filed tax returns that assert false and frivolous arguments for nearly a dozen members of the local law enforcement community.
The IRS has expressly denounced the zero-income and commercial redemption schemes as frivolous in its publication, "The Truth About Frivolous Tax Arguments." Return preparer fraud, bogus refund claims based on frivolous arguments, and zero wages also are three of the IRS's 2010 "Dirty Dozen" tax scams. Since 2001, the Justice Department's Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.