A federal court in the Eastern District of Michigan has endorsed an agreed preliminary injunction barring a Detroit-area tax return preparer and her businesses from preparing federal tax returns for others until the date on which trial on whether a permanent injunction is warranted occurs.
The preliminary injunction was entered against Annetta Powell and her tax preparation businesses, known to customers as “The Tax Experts,” and registered to do business in Michigan under varying entity names: Alliance Tax Services Inc., Nationwide Tax Services, Inc., Tax Expert Stores, Inc., United Tax Services Inc., Top Financial Specialists Inc. doing business as The Tax Experts, United Financial Team Corporation doing business as The Tax Experts, and Speedy Tax Stores Corporation doing business as The Tax Experts. The preliminary injunction also enjoins Jasmine Powell from preparing or filing federal tax returns. According to the amended complaint filed against the defendants, Powell and her companies had prepared returns that, among other things, reported inflated or fraudulent business losses, claimed false or inflated earned income credits, reported fraudulent filing statues, and claimed improper education credits, all of which resulted in tax refunds to which customers were not entitled.
According to the amended complaint, the fraudulent tax returns that Powell and her business prepared for customers cost the United States over one and a half million dollars in tax revenue.
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 preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information.
In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website at www.justice.gov/tax/tax-division-press-releases. For additional information, visit www.justice.gov/tax/program-shut-down-schemes-and-scams.
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