The United States has filed four civil suits in federal court in the US District Court for the Eastern District of Michigan. The lawsuits are aimed at prohibiting a tax preparation franchisor in the Detroit area from owning, operating, and franchising tax preparation businesses and for the franchisor and certain other companies that have agreements to operate under their company’s name to prepare tax returns for to prohibit others. The complaints also require the court to require all defendants to remove the tax return preparation fees they received from filing allegedly false and fraudulent tax returns.
The complaint against Jeanisia Allen alleges that she owns, operates and franchises a tax return preparation company known as “The Tax Experts” operated by co-defendants First Choice Tax Solutions LLC, The Tax Experts Inc., The Tax Experts LLC and Top Notch is operated Taxes Inc. The other three complaints allege that Jennifer Sherman, Erica McGowan, Annetta Powell and Jasmine Powell each have agreements with Jeanisia Allen and her company The Tax Experts LLC to use the name “The Tax Experts” to use.
Every government complaint alleges that the defendants and their companies prepare and file tax returns to falsely increase their customers’ reimbursements and benefit from high and often undisclosed preparation fees at the expense of their customers and the Treasury Department. The complaints allege that the defendants committed wrongdoing, including falsely claiming the earned income tax credit; Manufacture of business, business income and expenses resulting in undervalued tax liabilities; Right to wrong educational credits; and the assertion of an illegal login status. Each of the complaints alleges that the defendants’ activities have harmed their customers, who may now face substantial penalties and interest.
According to Allen’s complaint, The Tax Experts operated at least 32 stores, mostly in Metro Detroit, but also in Chicago and Los Angeles. In three years (2017, 2018, and 2019), companies serving as The Tax Experts reportedly completed more than 17,000 federal tax returns claiming over $ 82 million in tax refunds. The complaint alleges that Allen and The Tax Experts have failed to train, supervise, or control companies operating under an agreement to use this name, including failing to audit tax returns prepared in franchise stores, resulting in Drafting false or fraudulent tax returns that are common and have resulted in widespread false receipts, expenses, entitlements, credits and deductions. According to the complaint against Allen, the IRS reviewed 716 federal tax returns prepared by The Tax Experts, resulting in a total additional tax owed by the U.S. of $ 3,552,114, or an average of $ 5,349.57 for each adjusted tax return.
“Especially at this time of year when honest taxpayers file their tax returns, we want the public to know that the Justice Department, in cooperation with our partners at the IRS, will prosecute those who abuse our country’s tax laws,” said the Assistant Attorney General David A. Hubbert of Justice Department Taxation. “Fraudulent tax filers try too often to take advantage of their customers and the Treasury Department, which undermines our tax system.”
Returns Preparation Scam is one of the IRS’s filthy dozen tax scams, and taxpayers looking for a returns maker should stay vigilant. (You can also find more information here.) The IRS has information on how to choose a tax advisor on its website, has created a free directory of federal tax advisors, and provides information on how to avoid “ghost” taxpayers who should be refused to sign a tax return be a red flag for taxpayers. The IRS also has a list of important reminders for taxpayers about to file their 2020 tax returns, including preparing for a smooth filing process.
In addition, IRS Free File, a public-private partnership, provides free online tax preparation and filing options on IRS partner websites for individuals whose gross adjusted income is less than $ 72,000. For individuals whose income is above this threshold, the IRS Free File offers federal electronic tax forms that can be filled out and submitted online free of charge.
In the past decade, the tax department has received injunctions against hundreds of unscrupulous tax advisors. You can find information on these cases on the Ministry of Justice’s website. An alphabetical list of the people charged with preparing tax returns and promoting tax systems can be found on this page. If you believe any of the required individuals or businesses are in breach of an injunction, please contact the tax department with details.