Federal court shuts down Detroit-area father-and-son tax return preparers until further notice

On April 10, the U.S. District Court for the Eastern District of Michigan entered a preliminary injunction against Detroit-area tax return preparers Herman “Eddie” Simmons, Richmond Simmons, and the business Profile Income Tax Co., doing business as Simmons Income Tax Company, enjoining defendants from preparing federal income tax returns for others through the resolution of their case on the merits.

In issuing the preliminary injunction after holding a hearing and taking evidence, the court noted that the government supported its motion with twelve sworn declarations in which defendants’ customers disavowed various aspects of the returns that defendants prepared for them, in particular, false and inflated deductions for charitable contributions. Defendants’ customers’ declarations repeatedly stated that they had never discussed the deductions at issue with defendants, and that they had no idea why their returns contained the reported figures. Based on that customer testimony, and the similarities across all the fraudulent returns, the court found that “filing tax returns with falsified deductions plainly qualifies as acting in willful or reckless disregard of the tax code,” and “that defendants engaged in a pattern of willfully claiming false or inflated deductions to understate their clients’ liabilities.” The court also rejected defendants’ contention that they had made “honest mistakes” in the returns they prepared, finding that their claim that they simply reported whatever their customers told them was not credible. According to the court, “no reasonable tax preparer would proceed in such a grossly uninformed and willfully ignorant manner.”

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Shady tax return preparers remain a concern of the IRS, which recently warned taxpayers about unscrupulous tax return preparers as part of the IRS’s Dirty Dozen series. As the 2023 tax season continues, taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS (www.irs.gov) offers tips on how to accurately file returns and how to choose a tax return preparer, as well as steps taxpayers can take to get a jumpstart on filing. The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information.

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.  Anyone who believes that one of the enjoined persons or businesses may be violating an injunction should email the Tax Division with details at tax.mail @usdoj.gov.