A federal court in the Eastern District of Michigan has permanently barred a Detroit-area tax return preparer and her business from preparing federal tax returns for others.
The injunction was entered against Jennifer Sherman and her tax preparation business, Sherman Management Co. Inc. According to the complaint filed against the defendants, Sherman and her company had returns prepared that, among other things, reported false business income and expenses and claimed excessive deductions, resulting in undeserved refunds. The complaint also alleged that Sherman impermissibly lowered some of her customers’ tax liabilities by falsely claiming head of household status for individuals not entitled to claim it. According to the complaint, the fraudulent tax returns that Sherman and her business prepared for customers cost the United States hundreds of thousands of dollars in tax revenue.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found at www.irs.gov/newsroom/dirty-dozen.) 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 has a list of steps to take to make the 2022 filing season easier.
In addition, IRS Free File (www.irs.gov/filing/free-file-do-your-federal-taxes-for-free), 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 (www. justice.gov/tax/tax-division-press-releases). An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found at www.justice.gov/ tax/program-shut-down-schemes-and-scams. Anyone who believes that one of the enjoined persons or businesses may be violating an injunction should contact the Tax Division with details by calling 202-514-2901 or emailing TAX. MAIL@usdoj.gov.
