Justice Department Sues to Shut Down Detroit Tax Preparer

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Woman Allegedly Fabricates Business Income, Business Expenses and Education Credits on Customer Returns

The United States filed a lawsuit today to bar Margaret Brown, a Detroit tax return preparer, from

preparing federal tax returns for others, the Justice Depart

ment announced.


According to the co

mplaint, Brown prepared tax returns that falsely clai

med business inco

me, business expenses and education credits.  For exa

mple, the co

mplaint states that Brown prepared a tax return in 2011 that reported that the custo

mer had a barber business with inco

me of $9,673 and expenses of $124.  The custo

mer did not have a barber business in 2011, according to the co

mplaint, and had no idea where Brown obtained such infor

mation.  In another exa

mple listed in the co

mplaint, Brown allegedly reported $4,000 in qualified education expenses on a custo

mer’s 2011 tax return.  The co

mplaint alleges that neither the custo

mer nor her dependents attended college in 2011.


The co

mplaint also alleges that for tax years 2010 and 2011, Brown failed to co

mply with due-diligence require

ments i

mposed by federal law on tax preparers who claim

the Earned Inco

me Tax Credit on their custo

mers’ tax returns.


Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013.  The IRS has some tips on their website

for choosing a tax preparer.  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 website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found at this website.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division

with details.

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