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Justice News

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

FOR IMMEDIATE RELEASE
Wednesday, September 23, 2015

Federal Court Permanently Bars Wisconsin Tax Return Preparer From Preparing Tax Returns for Others

 

FEDERAL COURT PERMANENTLY BARS WISCONSIN TAX RETURN PREPARER FROM PREPARING TAX RETURNS FOR OTHERS

Allegedly Concocted Phony Businesses and Made Other False Claims on Customers’ Returns

     WASHINGTON – A federal court has permanently barred an Appleton, Wisconsin, tax return preparer from preparing federal tax returns for others, the Justice Department announced today.

     The civil injunction order prohibits Gerardo Garcia, aka Gerry Garcia, and his firm Garcia Enterprises LLC, from acting as a tax return preparer and from continuing to operate a tax return preparation business.  The order was entered by the U.S. District Court for the Eastern District of Wisconsin.  Garcia agreed to the entry of the injunction, but did not admit to the allegations in the  civil complaint against him.

     According to the complaint, Garcia prepared false and improper returns during the 2015 filing season, even though the Internal Revenue Service (IRS) had previously assessed $26,000 in penalties against him.  The complaint alleged that Garcia prepared tax returns on which he concocted phony businesses for his customers in order to understate his customers’ tax liabilities or inflate their refunds.  In addition, as alleged in the complaint, Garcia fabricated business expenses, understated his customers’ business income and claimed other false or improper deductions, credits and filing statuses.  In one case, the complaint alleged that Garcia prepared two tax returns for a customer that reported more than $10,000 in losses over two years from a non-existent “aquaculture” business that Garcia asserted his customer owned.  The complaint cited several additional examples, including Garcia improperly claiming child tax credits for children, who live outside of the United States; dependency exemptions without proof the customer supported the children; and incorrect filing statuses, such as head-of-household, that resulted in more favorable tax rates.

     The injunction order requires Garcia to provide the United States with a list of his customers since 2010 and to send a copy of the court’s injunction order to all customers for whom he prepared returns.  The injunction order also requires Garcia to provide a link to the court’s injunction order on any website he maintains and to post a copy in any physical business location in which he receives customers and potential customers for any bookkeeping, payroll or other financial services.

     Return preparer fraud is one of the 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’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.

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Updated February 4, 2016