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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Alabama

FOR IMMEDIATE RELEASE
Wednesday, April 27, 2016

Justice Department Seeks to Shut Down Alabama Tax Return Preparer

Preparer Allegedly Fabricates Businesses Losses, Claims Fraudulent Credits In Order to Understate Her Customers’ Tax or Overstate their Refunds

A number of tax return preparation businesses in the Birmingham, Alabama area unlawfully understate their customers’ income tax liabilities and overstate refunds by making deliberate misstatements on the returns, according to a new civil lawsuit filed by the Justice Department today.  The suit, filed in federal court in Birmingham, asks the court to permanently bar Jessica Leverett aka Jessica Harris, from preparing tax returns for others.  The suit also asks the court to order Leverett to turn over a list of all of the tax returns she has prepared. 

According to the complaint, Leverett owns and operates a number of different tax preparation businesses in the area, including Tax Money Now, L.L.C., Dynamic Tax Services, Dynamic Tax Solutions and Express Money Tax.  The government’s complaint alleges that Leverett and her associates prepared returns that fabricate self-employment businesses and business losses to offset their customers’ taxable income from other sources and to increase their customers’ Earned Income Tax Credit.  When a customer does have a small business, the complaint alleges, Leverett and her associates mischaracterize the business income as household employee wages in order to avoid paying the required self-employment tax.  The complaint also alleges that Leverett’s businesses claim education credits that the customers are not entitled to receive.

According to the complaint, the Internal Revenue Service (IRS) has examined 264 returns prepared by Leverett’s businesses and found that 206 understate the tax owed by Leverett’s customers by thousands of dollars on average.  The complaint alleges that Leverett’s activities may have caused the United States to lose over $2.5 million in understated taxes and/or fraudulent refunds.   

Return preparer fraud is one of the IRS’s 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.

Topic(s): 
Financial Fraud
Tax
Updated June 9, 2016