DOJ Sets Its Sights on Nine Florida Tax Preparers


In a move that highlights the potential hazards of tax preparation services, the US Justice Department has filed a lawsuit seeking to bar nine Florida tax return preparers and their associated businesses from participating in the preparation of federal income tax returns for others. This announcement should serve as a stark reminder for small businesses to thoroughly vet their tax preparation services.

The complaint, filed in the U.S. District Court for the Southern District of Florida, alleges that these nine individuals, namely Richard Louis, Teddy Davis, James Merrill, Daniel Ouku, Demetrius Knowles, Harold Bornelus, Joseph Garrett, Marlyne Wah, and Romeo Davis, filed thousands of fraudulent federal income tax returns for customers via an unincorporated entity known as Taxman. The complaint further claims that their actions have resulted in the United States losing millions of dollars in tax revenue.

One of the primary fraudulent schemes allegedly used by the defendants was claiming illegitimate Residential Energy Credits on their customers’ tax returns. Furthermore, it is alleged that Louis and Taxman falsified and overstated business and itemized deductions on their customers’ tax returns and prepared tax returns for customers claiming the incorrect filing status. The alleged actions have led to their customers receiving refunds to which they were not entitled.

David A. Hubbert, Deputy Assistant Attorney General of the Justice Department’s Tax Division, announced these allegations.

This development is particularly crucial for small business owners who often rely on third-party tax preparers. Owners must remain vigilant against potentially unscrupulous tax preparers. The IRS offers helpful tips on how to accurately file returns, how to choose a tax return preparer, and steps taxpayers can take to get a head start on filing.

The IRS also provides a free directory of federal tax preparers to assist taxpayers in need. In addition, programs are available offering free basic return preparation for qualifying seniors and individuals with low to moderate income. 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 those over this threshold, IRS Free File offers electronic federal tax forms that can be filled out and filed online for free.

Over the past decade, the Department of Justice Tax Division has obtained injunctions against hundreds of dishonest tax preparers, highlighting the importance of this issue. Information about these cases can be found on the Justice Department’s website, including an alphabetical listing of persons enjoined from preparing returns and promoting tax schemes.

For small businesses, the message is clear: due diligence in selecting tax preparers is of the utmost importance. If you suspect an enjoined person or business may be violating an injunction, you are urged to contact the Tax Division with details. The actions of the Justice Department serve as a reminder that the issue of tax preparation fraud is taken very seriously and will continue to be aggressively pursued.

Image: Depositphotos

Joshua Sophy Joshua Sophy is the Editor for Small Business Trends and has been a member of the team for 16 years. A professional journalist with 20 years of experience in traditional media and online media, he attended Waynesburg University and is a member of the Society of Professional Journalists. He has held roles of reporter, editor and publisher, having founded his own local newspaper, the Pottsville Free Press.