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.

ALABAMA TAX PREPARER INDICTED FOR FILING FRAUDULENT TAX RETURNS

FROM:  JUSTICE DEPARTMENT 
Thursday, January 16, 2014

Alabama Tax Preparer Indicted for Preparing False Returns for Clients
Russell Burroughs, a resident of Montgomery, Ala., was indicted on 33 counts of filing false tax returns, Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced today following the unsealing of the indictment yesterday.

According to the indictment, Burroughs owned and operated Computer Services, a tax return business located in Montgomery, Ala.  Burroughs allegedly prepared and filed 33 false tax returns.  The indictment alleges that the false items on the tax returns included false energy and education credits, false deductions and other false information.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Burroughs faces a statutory maximum potential sentence of three years in prison for each count of filing a false return.

The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation.  Trial Attorneys Charles Edgar Jr., Katherine Reinhart and Michael Boteler of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama.

COURT SHUTS DOWN TAX PREPAER FOR ALLEGED FALSIFICATION OF TAX RETURNS

FROM:  U.S. JUSTICE DEPARTMENT 
Tuesday, December 24, 2013
Federal Court Shuts Down Montgomery Area Tax Preparer
Alabama Preparer Allegedly Falsified Tax Returns at Cost of Millions to U.S. Treasury

A federal court in Montgomery, Ala., permanently barred Kenya Hendrix Adams from preparing tax returns for others, the Justice Department announced today.   The permanent injunction order was signed by U.S. District Court Judge Mark E. Fuller of the Middle District of Alabama.

The order, filed on Dec. 20, 2013, also requires Adams to turn over to the United States copies of all returns or claims for refund that she prepared after Jan. 1, 2008, and to notify each person for whom she prepared returns since that date.   The order authorizes the United States to monitor Adams’ compliance with the terms of the order.

The government’s complaint alleged that Adams repeatedly prepared federal tax returns that understated her clients’ federal tax liabilities.   According to the complaint, Adams did so by falsely claiming or inflating tax credits or fabricating deductions.   The suit alleges that the harm to the United States Treasury as a result of her conduct could be in the millions of dollars.

“These fraudulent tax preparers create a horrible problem in this area,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.   “What these people are doing must be stopped.   I applaud the IRS for taking the steps to shut down those fraudulent tax preparers.”

Claiming bogus tax refunds is one of the IRS’s Dirty Dozen Tax Scams.   In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers.   Information about these cases is available on the Justice Department website .   For more information about choosing a tax return preparer, see the IRS website and the IRS YouTube Channel .