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Monday, April 27, 2015

DOJ SEEKS PERMANENT SHUTDOWN OF TAX PREPARER FOR FILING BOGUS TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, April 22, 2015
Justice Department Asks Federal Court to Permanently Shut Down Liberty Tax Service Franchise Owner

The United States filed a complaint asking a federal court in Detroit to bar a Liberty Tax Service franchise owner and his companies based in Illinois and Michigan from preparing federal tax returns for others, the Justice Department announced today.

The civil complaint against Syed N. Ahmed and his businesses, Nasah Inc., Millinium [sic] Financial Solutions Inc., Mars Inc.-Hamtramck, and Mahad Inc., was filed in the U.S. District Court for the Eastern District of Michigan.  The complaint alleges that Ahmed operates at least 10 Liberty Tax Service franchise locations.

According to the suit, the defendants improperly obtain inflated tax refunds and refundable credits for customers by preparing tax returns that include, among other things, false or inflated Schedule C (Profit or Loss From Business) income and expenses, bogus dependents, false filing statuses, improper education credits and false itemized deductions.

For example, the complaint alleges that one of defendants’ tax return preparers fabricated a driving business without the customer’s knowledge and reported thousands of dollars of expenses for that business that the customer did not incur.  The false expenses enabled the customer to receive an earned income tax credit that she was not otherwise entitled to receive, according to the suit.

The lawsuit states that the defendants prepared more than 17,000 federal income tax returns between 2010 and 2013.  Based on audit adjustments the Internal Revenue Service (IRS) has made to tax returns prepared and filed by the defendants between 2010 and 2013, the defendants’ conduct has cost the U.S. Treasury approximately $2.8 million, according to the suit.