Tax
Return Preparers Allegedly Claim Improper Tax Credits and Prepare Fake W-2 Wage
Forms for Customers
The United States has asked a
federal court to shut down a Mo’ Money Taxes tax preparation office in
Nashville, the Justice Department announced today. The civil injunction suit,
filed against Mo’ Money licensee Toney Fields and co-defendant Trumekia Shaw in
U.S. District Court in Nashville, alleges that the two defendants intentionally
prepare and file fraudulent federal income tax returns to obtain improper tax
refunds for customers.
According to the complaint, Fields
and Shaw get an improper jump on their competition by opening Mo’ Money Taxes
in Nashville in late December and before the tax year ends. The defendants
allegedly use customers’ end-of-year pay stubs to prepare tax returns, before
employers have issued Internal Revenue Service (IRS) W-2 wage-statement forms
to employees. Preparing tax returns based on pay stubs rather than proper W-2
Forms violates IRS rules. Fields and Shaw allegedly use the pay stubs to create
fake W-2 Forms to include with the returns. End-of-the-year pay stubs
frequently omit income and distributions that are shown on employer-issued W-2
Forms. This inevitably results in errors on federal tax returns.
The lawsuit further alleges that
Fields and Shaw inflate or claim false tax credits on customers’ tax returns.
According to the complaint, Fields and Shaw frequently claim improper dependent
exemptions in order to claim inflated earned-income credits or child tax
credits for their customers. The suit also alleges that the defendants include
false filing statuses and bogus claims for charitable contributions on
customers’ returns. The complaint says the government estimates that the
defendants’ misconduct may have caused revenue losses of more than $5 million
from the more than 1,100 tax returns they prepared in 2011.
The IRS lists return preparer fraud
as one of its “Dirty Dozen” tax scams.
In the past decade the Justice
Department’s Tax Division has obtained injunctions against hundreds of
tax-return preparers and tax-fraud promoters. Information about these cases is
available on the Justice Department website.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.
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