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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of North Carolina

FOR IMMEDIATE RELEASE
Tuesday, February 5, 2019

Justice Department Warns Taxpayers to Avoid Unscrupulous Tax Return Preparers

WASHINGTON – As tax filing season begins, the Department of Justice warns taxpayers to beware of unscrupulous tax return preparers. The Department of Justice applies both civil and criminal tools at its disposal to shut down illegal tax return preparation activity. Taxpayers should always remain wary of tax return preparers who claim they can obtain larger refunds than others or engage in other unscrupulous practices.

While most tax return preparers are professional and honest, some prepare returns with false information in order to improperly boost a taxpayer’s refund or reduce their liability or to increase business and preparation fees. But, under the law, taxpayers are responsible for what is reported on their returns. When the IRS uncovers the falsehoods, the taxpayer can face penalties and interest and, if circumstances warrant, criminal prosecution.

“Fraudulent tax return preparers harm taxpayers, legitimate businesses, and the American public,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman.  “The Justice Department is committed to working with our partners at the Internal Revenue Service to protect the law-abiding American public and the treasury by stopping this fraud.”

Every year, the Justice Department’s Tax Division, in collaboration with U.S. Attorney’s Offices, files dozens of civil actions throughout the United States seeking court orders to shut down tax return preparers who allegedly prepared false tax returns, and to punish dishonest tax return preparers for their fraudulent activities. When the evidence supports criminal enforcement action, the Department of Justice and U.S. Attorney’s offices pursue criminal prosecutions of tax return preparers.

In 2019, the Justice Department has already obtained several injunctions barring individuals from filing returns for others, and filed actions against numerous others:

  • On Jan. 4, 2019, a federal court in Indianapolis, Indiana, permanently enjoined Antonio Chappell and G & A Tax Service LLC, from preparing federal tax returns for others. The court noted that the defendants had prepared tax returns with a wide range of scams, including falsifying reported income or losses to wrongfully increase or claim the Earned Income Tax Credit, fabricating education expenses to obtain the American Opportunity Credit for certain educational expenses; misrepresenting a taxpayer’s filing status; and reporting non-qualifying dependents to take advantage of the Additional Child Tax Credit.
  • On Jan. 7, 2019, a federal court in Orlando, Florida, entered a preliminary injunction barring Erotida Harden, Michael Harden, Aida Cortes, Yahaira Claudio, Tamika Robenson, Natasha Williams, and Certified Taxes LLC, from acting as tax return preparers and directing them to immediately close all tax return preparation stores that they currently own directly or through any entity and not to reopen them without a court order.
  • On Jan. 16, 2019, a federal court in Orlando, Florida, entered a preliminary injunction barring Marcgenson Marc, Tiana Character, LeNorris LaMoute, Dosuld Pierre, Shirleen Thales, Advanced Tax Services Inc., Genson Financial Group LLC, and Character Financial Solutions LLC from acting as tax return preparers and directing them to immediately close all tax return preparation stores that they currently own directly or through any entity and not to reopen them without a court order.

Examples of some recent criminal convictions obtained by the Tax Division include:

  • On Jan. 28, 2019, a Minneapolis-based tax return preparer was sentenced to serve 121 months in prison for managing and directing a fraudulent return-preparation business, which prepared returns that reported false dependents, fake business income and losses, inflated deductions, inflated credits, and false filing statuses, in order to get customers inflated refunds.
  • On Nov. 14, 2018, a Las Vegas, Nevada, tax return preparer was sentenced to 37 months in prison for aiding and assisting in the filing of false tax returns that included multiple false items, including charitable contributions, capital loss deductions, energy tax credits, and unreimbursed employee expenses—such as business meals and transportation expenses.
  • On Sept. 13, 2018, a resident of Winton-Salem, North Carolina, who was licensed as an attorney in Georgia, was sentenced to 13 months in prison for aiding and assisting in the preparation of fraudulent tax returns.

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’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

In addition, when selecting a tax return preparer:

  • Be wary of tax return preparers who claim they can obtain larger refunds than others can.
  • Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of your refund into their financial accounts.
  • Ensure you use a preparer with a preparer tax identification number (PTIN). Paid tax return preparers must have a PTIN to prepare all or substantially all of a tax return.
  • Use a reputable tax professional, who enters their PTIN on your tax return, signs the tax return, and provides you a copy of the return (as required).
  • Consider whether the individual or firm will be around for months or years after filing the return to answer questions about the preparation of the tax return.
  • Never sign a blank tax form.
  • Check the person’s credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collections, and appeals.

The IRS has some information on its website about selecting a return preparer and has launched a free directory of federal tax preparers and a list of tips for choosing a tax preparer.

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If you have questions, please use the contacts in the message or call the Office of Public Affairs at 202-514-2007.

Updated February 5, 2019