Justice Department Sues to Shut Down East St. Louis Tax Return Preparer

The following press release was published by the US Department of Justice on July 5, 2007. It is reproduced in full below.

FOR IMMEDIATE RELEASE THURSDAY, JULY 5, 2007 WWW.USDOJ.GOV TAX (202) 514-2007 TDD (202) 514-1888 Illinois Woman’s Alleged Misconduct Estimated to Have Caused $2.9 Million Loss to U.S. Treasury WASHINGTON—The Justice Department has filed a civil injunction suit seeking to bar East St. Louis, Ill., resident Mary Powell from preparing federal tax returns for others. According to the government complaint filed in U.S. District Court in East St. Louis, Powell has prepared more than 1,000 returns since 2003.

The complaint states that the Internal Revenue Service (IRS) examined 109 returns Powell prepared and found that all of them understated the customer’s tax liability. According to the complaint, the average under-reported tax was $2,794 per return, and the estimated total cost to the U.S. Treasury from Powell’s improper return preparation is $2.9 million.

The suit alleges that Powell fabricates or inflates business expense deductions, improperly lists ineligible dependents, claims false earned income tax credits, and claims false education credits. The suit asks the court to order Powell to give the government a list with her customers’ names, addresses, e-mail addresses, phone numbers and Social Security numbers.

Since 2001 the Justice Department’s Tax Division has obtained more than 240 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these efforts can be found at http://www.usdoj.gov/tax/taxpress2007.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax/index.html. 07-484

Source: US Department of Justice