DOJ ASKS COURT TO SHUT DOWN TAX RETURN PREPARER IN CASE INVOLVING INELIGIBLE CHILD TAX CREDITS, OTHER ALLEGATIONS

FROM:  U.S. JUSTICE DEPARTMENT
Tuesday, March 17, 2015
Justice Department Asks Federal Court to Shut Down Indiana Tax Return Preparer

The United States filed a complaint seeking to permanently bar an Indianapolis woman from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction complaint against Jennifer Carolina Gonzalez, doing business as Jenny’s Tax Services, which was filed in the U.S. District Court for the Southern District of Indiana, alleges that Gonzales fraudulently adjusted customers’ income claimed on Schedule C (Profit or Loss From Business) to either increase an Earned Income Tax Credit the customer was not entitled to, or to reduce the customer’s tax liability.  Gonzalez, according to the suit, also frequently prepared returns claiming head of household filing status for customers who were ineligible.  The complaint alleges that Gonzalez frequently prepared returns claiming child tax credits for customers’ relatives who lived in Mexico and had never lived in the United States, even though Gonzalez knew that children living in Mexico cannot be used to support child tax credits and additional child tax credits.

Tax return preparers must provide their Preparer Tax Identification Number (PTIN) on returns they prepare.  As alleged in the complaint, as part of a pattern of non-compliance, Gonzalez failed to provide her own PTIN on returns she prepared until January 2013.  Instead, the complaint alleges that Gonzalez used a PTIN assigned to a person living in New Jersey, who has no connection to Gonzalez and has never authorized Gonzalez or anyone else to use the PTIN.

The complaint further alleges that, in 2012, Gonzalez sold the use of the third-party PTIN she had appropriated, her own Electronic Filing Identification Number (EFIN) and Jenny’s Tax Services’ Employer Identification Number (EIN) to another tax preparation business, which agreed to pay Gonzalez $20 per return filed containing Gonzalez’s identification numbers.  Despite selling the use of the identification numbers, Gonzalez continued to use the identification numbers when preparing returns for the 2011 tax year, as did the purchaser.

According to the complaint, the Internal Revenue Service (IRS) estimates that Gonzalez, through Jenny’s Tax Service, has prepared more than 2,000 tax returns since 2011.  The suit alleges that the false information she included on her customers’ tax returns generated larger refunds or reduced tax liabilities for Gonzalez’s customers, and that the losses to the U.S. Treasury could exceed $3.9 million.