U.S. files tax fraud suits in 4 cities

Jan. 7, 2010 at 4:20 PM
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WASHINGTON, Jan. 7 (UPI) -- U.S. officials said they filed five suits against several people and tax-preparation services for allegedly making false deduction and credit claims to clients.

The suits were filed this week in Detroit, Cincinnati and Chicago.

Last month, the government said, officials filed similar civil injunction lawsuits against 12 people and businesses in Providence, R.I.

All of the defendants' actions caused substantial revenue loss to the U.S. Treasury, officials said, much of which may be not be recoverable.

John A. DiCicco, acting assistant attorney general for the U.S. Justice Department's Tax Division, said in a statement, "The (Internal Revenue Service) and Justice Department are working together closely to ensure that unscrupulous return preparers are shut down and their customers pay their correct federal tax liabilities."

In a press release, the Justice Department said the lawsuits ask courts to forbid the defendants to prepare tax returns and other tax documents, represent clients before the Internal Revenue Service, advise clients about federal taxes or promote tax-fraud schemes.

The release said the defendants engaged in a variety of schemes to use false deductions and credit claims to fraudulently reduce clients' tax liability.

"For example, court filings in Rhode Island against Michael Brier, operating through Refunds Now Inc. and Refunds Now Tax Service Inc.," the release said, "allege that he prepared or directed the preparation of over 24,000 customer tax returns containing fabricated charitable contributions and employee business expense deductions, inflated dependent exemptions, fraudulent earned income tax credit claims and false income and expense reporting relating to rental real estate."

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