The United States Department of Justice (DOJ) is cracking down on the fraudulent operation of tax preparation businesses throughout the country. The agency has recently pursued prosecution of such businesses in Florida, North Carolina and Georgia. The agency reports it has obtained injunctions against hundreds of tax preparation professionals over the past ten years.
When successful, these efforts result in permanent injunctions and monetary penalties against those who allegedly violate tax laws.
A recent example involves the agency filing a civil injunction against the owner and operator of a tax preparation business to keep him from “owning, operating, or franchising a tax return preparation business or preparing tax returns for others.” The move was supported by allegations the tax professional falsely increased client’s refunds while also charging “exorbitant” and often undisclosed fees of customers.
The allegations include claims the tax prep business would often falsely claim Earned Income Tax Credits and chose the wrong filing status as well as made up business expenses in an attempt to receive a higher return. If the claim is successful, the tax preparer will likely be unable to continue in his profession and could face serious monetary penalties. In some cases, investigations by the government can lead to criminal prosecution that includes jail time.
Such allegations are not uncommon. Tax preparers accused of similar wrongdoing by the IRS are wise to take the allegations seriously. Contact an attorney to begin building a defense to the allegations and work to protect both your professional and personal reputation.