A federal court in the Eastern District of Michigan has permanently enjoined two Detroit, Michigan-area tax return preparers and their Detroit-based business from preparing returns for others and from owning or operating any tax return preparation business in the future.
The civil complaint filed in the case alleged that Latavia Garrett, Latrina Hall, and their tax return preparation company, Detroit Tax Solution LLC, prepared fraudulent federal income tax returns. According to the complaint, defendants filed fraudulent federal tax returns that included the following schemes: reporting false income and expenses from fictious businesses; falsely claiming eligibility for child tax credits and education credits; falsely claiming dependents to increase the amount of earned income tax credits; utilizing falsely-reported prior year earned income to make customers eligible for tax credits; underreporting wage income; and, as to defendant Hall, often acting as a “ghost preparer” – that is, failing to sign the tax returns she prepared and failing to identify herself in any way on the returns. As alleged in the complaint, the IRS has conservatively estimated that defendants’ fraudulent return preparation activities have caused a combined loss to the United States for tax years 2019 and 2020 exceeding $1.2 million.
According to the court’s order, defendants consented to entry of the injunction, which permits the United States to conduct post-judgment discovery to monitor compliance. The order requires that defendants (1) send notice of the injunction to each person for whom they and their company prepared federal tax returns, amended tax returns, or claims for refund after January 1, 2019, and (2) post an electronic copy of the injunction on any business social media profile currently maintained or created over the next five years.
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 return preparer and has launched a free directory of federal tax preparers (www.irs.gov/tax-professionals/choosing-a-tax-professional). The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information (www.irs.gov/compliance/criminal-investigation/irs-criminal-investigation-issues-10-tips-to-avoid-tax-season-fraud).
In the past decade, the Department of Justice 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. For those who believe that one of the enjoined persons or businesses may be violating an injunction, email the Tax Division with details at tax.mail@usdoj.gov.
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