JUSTICE DEPARTMENT SUES TO STOP ALLEGED TAX SERVICE FOR FRAUDSTERS

The following excerpt is from the Department of Justice website:

January 18, 2012

"The United States has sued Larry Carnell Dixon Sr., seeking to bar him and his business, Dixon’s Tax Service, from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction complaint, filed in the U.S. District Court for the Middle District of Louisiana, alleges that Dixon, of Zachary, La., prepares federal income tax returns for customers claiming fabricated and inflated business expense deductions for existing or fictitious businesses. The lawsuit alleges that Dixon fraudulently uses these fabricated business expenses to decrease his customers’ tax liabilities or increase their refunds, including refunds arising from the earned income tax credit.

According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 194 of the 198 income tax returns prepared by Dixon’s Tax Service and audited by the IRS resulted in tax deficiencies. The lawsuit alleges that the tax harm caused by Dixon’s misconduct could be as much as $39 million.

The complaint also asks the court to require Dixon to provide the government with a list of all customers for whom Dixon’s Tax Service prepared returns after Jan. 1, 2006.

In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. "

U.S. FILES SUIT TO BLOCK FRAUDULANT TAX REFUND SCHEME

The followng excerpt is from the Department of Justice website:

Friday, December 9, 2011
"WASHINGTON - The United States has sued Sharon Angulo and Claudia Zuloaga to bar them from promoting an alleged tax fraud scheme and from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction suit, filed in the Southern District of Florida, alleges that Angulo and Zuloaga, both of Miami, help customers use Internal Revenue Service (IRS) Forms 1099-OID to report fictitious income tax withholding. According to the government complaint, the customers file federal tax returns claiming tax refunds based on the fake withholding. The complaint states that the defendants have prepared or assisted in the preparation of at least 19 tax returns reporting false withholding and claiming fraudulent tax refunds totaling more than $3 million.

The government’s complaint asks the court to require Angulo and Zuloaga to pay the U.S. Treasury the funds they received from customers who paid them a percentage of the tax refunds received through the scheme. The complaint also asks the court to order the defendants to provide the government with a list of all persons who have purchased any products, services or advice from Angulo and Zuloaga in the past three years as part of the scheme.

Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s Dirty Dozen Tax Scams for 2011 . In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website."

IRS FRAUD SCHEME NETS A 41 MONTH PRISON TERM FOR PARTICIPANT

Whenever I do business on the internet I am always concerned about making sure that the website I am going to is the site which represents the person or company I wish to have a correspondence or place a purchase order. In the case below tax payers were conned out of their money by people claiming to represent websites that were authorized by the IRS to help for free, low income earners file their income taxes. The following excerpt is from the Department of Justice web site:

"Wednesday, June 22, 2011
Belarusian National is Sentenced to 41 Months in Prison for Participating in International Online Scheme to Steal U.S. Tax Refunds
WASHINGTON – A Belarusian national and resident of Nantucket, Mass., was sentenced today in federal court to 41 months in prison for his participation in an international online scheme to steal income tax refunds from U.S. taxpayers around the country, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge William P. Offord of the Internal Revenue Service-Criminal Investigation (IRS-CI).

Mikalai Mardakhayeu, 31, was sentenced by U.S. District Court Judge George A. O’Toole Jr. in the District of Massachusetts. Mardakhayeu pleaded guilty in January 2011 to one count of conspiracy and nine counts of wire fraud. Judge O’Toole also sentenced Mardakhayeu to two years of supervised release and ordered him to pay $209,000 in restitution.

According to court documents and information presented at the change of plea hearing, from 2006 through 2007, Mardakhayeu’s co-conspirators lured victims by operating websites that falsely claimed to be authorized by the IRS to offer lower-income taxpayers free online tax return preparation and electronic tax return filing (e-filing). After taxpayers input and uploaded their tax information, co-conspirators in Belarus collected the data and altered the returns to increase the refund amounts and to direct the refunds to U.S. bank accounts controlled by Mardakhayeu. They then caused the fraudulently altered returns to be e-filed with the IRS. The conspirators ultimately caused the U.S. Treasury and various state treasury departments to deposit more than $200,000 in stolen refunds into bank accounts controlled by Mardakhayeu.

The case was investigated by the IRS-Criminal Investigation and the Treasury Inspector General for Tax Administration. The case was prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the District of Massachusetts’s Computer Crimes Unit."