With less than one month left in the 2021 tax season, the U.S. Department of Justice urges taxpayers to choose their return preparers wisely, according to a news release.
“Unscrupulous preparers who include errors or false information on a customer’s return could leave a taxpayer open to liability for unpaid taxes, penalties, and interest,” the news release said.
Over the last year, the Justice Department’s Tax Division has worked with U.S. Attorney’s Offices around the country to bring both civil and criminal action against dishonest tax preparers, seeking as appropriate civil injunctions to stop ongoing fraud, civil penalties or disgorgement of ill-gotten proceeds, and criminal sanctions.
The Justice Department “intends to send a strong message that those who prepare fraudulent returns will face serious and lasting consequences,” the release said.
An example of civil injunctions obtained by the Tax Division over the last year includes:
On Aug. 27, 2020, a federal court in the Western District of Tennessee permanently enjoined Rickey Greer and Stacie Smith (formerly Greer) from acting as federal tax return preparers, assisting in any way in the preparation of federal income tax returns, and representing any person before the IRS. Under the terms of the injunction, the Greers agreed to give up their IRS-assigned preparer identification numbers.
The Tax Division has also sought to strip fraudulent preparers of ill-gotten gains and to hold in contempt those who attempt to flout court-ordered restraints on further fraudulent activity. Over the last year. One example is:
On March 3, 2021, a federal court in the Middle District of Florida, Orlando Division, enjoined Michelle Jenkins from acting as a return preparer, owning a tax preparation business, or training others in the preparation of tax returns. Jenkins must immediately, permanently close any tax preparation stores she owns, and may not franchise any tax return business to others or her customer lists. Jenkins was ordered to disgorge $25,000 in proceeds from her fraudulent tax preparation. On April 9, 2021, Jenkins’ co-defendants, Ben Philippe, Clebert Philippe, and Reliance 1 Tax Services LLC, were similarly enjoined. Ben Philippe was ordered to disgorge $96,945.10; Clebert Philippe and Reliance 1 Tax Services together were ordered to disgorge $134,633.00.
Criminal convictions obtained by the Tax Division over the last year include:
On Nov. 13, 2020, Kenneth Crawford Jr. was convicted at trial and sentenced to 78 months in prison for conspiring to defraud the United States, filing false claims, and obstructing the internal revenue laws. According to evidence presented at trial, between 2015 and 2016, Crawford and his co-conspirators promoted and sold a “mortgage recovery” tax fraud scheme that sought fraudulent refunds from the IRS for their clients.
On Oct. 7, 2020, Terry Williamson was sentenced to 70 months in prison for conspiracy to commit mail and wire fraud, following his conviction at trial by a federal jury in Las Vegas. The evidence at trial proved that from January 2009 through April 2011, Williamson and his co-conspirators filed false tax returns with the IRS to fraudulently obtain tax refunds using the names and social security numbers of deceased taxpayers.
The Tax Division reminds taxpayers that the IRS has information for choosing a tax preparer on its website: https://www.irs.gov/tax-professionals/choosing-a-tax-professionals.
The IRS has also launched a free directory of federal tax preparers that can be viewed at: https://irs.treasury.gov/rpo/rpo.jsf
The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns that can be viewed by clicking onhttps://www.irs.gov/newsroom/important-reminders-before-filing-2020-tax-returns?utm_medium=email&utm_source=govdelivery.
In addition the IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. It can be viewed by clicking onhttps://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free?utm_medium=email&utm_source=govdelivery.
For individuals whose income is over that threshold, IRS Free File offers electronic federal tax forms that can be filled out and filed online for free.
Acting Assistant Attorney General David A. Hubbert of the Tax Division said in the release that 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: https://www.justice.gov/tax/tax-division-press-releases?utm_medium=email&utm_source=govdelivery.
An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on the page. If it is believed that one of the enjoined persons or businesses may be violating an injunction, contact the Tax Division at: https://www.justice.gov/tax/program-shut-down-schemes-and-scams?utm_medium=email&utm_source=govdelivery.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams,” which can be viewed by clicking on: https://www.irs.gov/newsroom/irs-unveils-dirty-dozen-list-of-tax-scams-for-2020-americans-urged-to-be-vigilant-to-these-threats-during-the-pandemic-and-its-aftermath?utm_medium=email&utm_source=govdelivery.