Federal court permanently shuts down Michigan tax preparers

A federal court in the Western District of Michigan has permanently enjoined a married couple from preparing returns for others and from owning, operating, or franchising any tax return preparation business in the future.

The civil complaint filed in the case alleged that Rosa Linda Meyer, aka Rosa Linda Hernandez, and doing business as Su Casa Income Tax Service, prepared federal income tax returns containing false and fraudulent claims. It further alleges that Rosa Linda Meyer’s spouse Stanley Meyer, doing business as I-Tax Services, prepared fraudulent returns in concert with Rosa Linda Meyer after she was investigated by the IRS. In addition, the complaint alleges that Rosa Linda Meyer also prepared and filed returns using Stanley Meyer’s name. According to the complaint, the false and fraudulent claims made in returns prepared by either or both of the Meyers included: (1) false or inflated dependency exemptions and related false or inflated child tax credits; (2) false head of household filing status resulting in a lower tax due (and higher refund); and (3) fictitious or inflated earned income, in order to allow the taxpayer to falsely claim the Earned Income Tax Credit (EITC) or to claim an inflated EITC.

According to the court’s order, defendants joined in the motion for an injunction, which permits the United States to conduct full post-judgment discovery to monitor compliance. The terms of the order require that the Meyers and their businesses send notice of the injunction to each person for whom they prepared federal tax returns or claims for refund “beginning in 2016 and continuing through this litigation.”

Acting 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 here.) The IRS has information on its website (www.irs.gov/tax-professionals/choosing-a-tax-professional) 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.

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 this page. Anyone who believes that one of the enjoined persons or businesses may be violating an injunction should contact the Tax Division (www.justice.gov/tax) with details.