U.S. Department of Justice, Office of Public Affairs, "Justice Department Sues to Shut Down Michigan Return Preparers" (March 6, 2024)

Summary

Justice Department Office of Public Affairs release of March 6, 2024 announcing a civil complaint filed in the Eastern District of Michigan seeking to bar J&A Tax Services LLC, doing business as Equitax, and several individual preparers from owning or operating a tax return preparation business or preparing returns for others. The complaint alleges the defendants knowingly took unreasonable or incorrect positions that understated customers' tax liabilities or overstated refunds, including false business income or loss on Form 1040 Schedule C, fabricated child and dependent care expenses, fictitious education credits and false COVID-19 sick and family leave credits. In 2022 alone the defendants allegedly filed 865 returns, at least 98% claiming a refund, with the loss in tax revenue estimated at over $2 million for the 2021 tax year alone.

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The Justice Department filed a complaint today seeking to bar several Michigan tax return preparers from owning or operating a tax return preparation business and preparing tax returns for others.

The civil complaint against J&A Tax Services LLC, doing business as Equitax; Anne Heibeck aka Ann Marie Dziergas; Crystal Patrick; Debra Washington; Kianna Dancy; Sade Cooper and Tasha Washington was filed in the U.S. District Court for the Eastern District of Michigan.

The complaint alleges that the defendants, using a variety of schemes, knowingly took unreasonable or incorrect positions on tax returns they prepared that resulted in understating their customers’ tax liabilities or overstating the amount of refunds their customers were entitled to receive. The complaint alleges that the defendants prepared customers’ returns that included various false or fabricated deductions and credits, including falsely reporting business income or loss on Form 1040 Schedule C, either by reporting fictitious sole proprietorships or by manipulating authentic sole proprietorship income and expenses, fabricated child and dependent care expenses, fictitious credits for education expenses and false COVID-19 sick and family leave credits.

The government further alleges that in 2022 alone, the defendants filed 865 returns, with at least 98% of the returns claiming a refund. By repeatedly reducing their customers’ tax liabilities or inflating their customers’ refunds, the complaint alleges that defendants harmed the United States through, among other things, the significant loss in tax revenue, estimated at over $2 million for the 2021 tax year alone.

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS also offers guidance on the credentials and qualifications that taxpayers should seek from their return preparer.

In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website . An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page . If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details .

J&A file stamped complaint.pdf

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