FOR IMMEDIATE RELEASE MONDAY, MAY 14, 2007 WWW.USDOJ.GOV TAX (202) 514-2007 TDD (202) 514-1888 Seneca, Ill., Couples Firm Found to Have Profited by Defrauding IRS WASHINGTON A federal court in Chicago has barred Neal and Royanne Reddy and their corporation, Royanne & Company Inc., from preparing tax returns for others, the Justice Department announced today. The court found that the Reddys, whose business offices are in Marseilles and Princeton, Ill., prepared more than 15,000 tax returns between 2002 and 2005.
In the preliminary injunction order entered in the civil case following a one-day trial, Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois noted that Royanne Reddy directed her firms employees to fabricate or inflate deductions to generate larger tax refunds for customers. Evidence at the trial, based on 72 tax returns prepared by Royanne & Company that the IRS audited, showed a 100 percent error rate, which the court found appalling and not the product of loose controls or inadequate supervision, but the product of design. The court noted that the IRS estimated that the Reddys caused tax revenue losses totaling $13 million. In denying the Reddys request to stay the injunction pending an appeal, the court said they have no right to continue to profit by defrauding the U.S. Treasury.
The court order requires the Reddys to notify their customers of the courts findings and post the courts findings at their businesses and on their Web site. They must also file by June 8 with the court a list identifying their customers. The order will remain in effect indefinitely, until further order of the court. http://www.usdoj.gov/tax/txdv04785.htm Since 2001 the Justice Department has obtained injunctions against more than 240 tax preparers and tax-fraud promoters. Information on those cases is available at http://www.usdoj.gov/tax/taxpress2007.htm. More information about the Justice Departments Tax Division can be found at www.usdoj.gov/tax 07-351
Source: US Department of Justice
