JUSTICE DEPARTMENT SEEKS TO STOP NORFOLK CITY EMPLOYEE FROM PREPARING FEDERAL TAX RETURNS FOR OTHERS

City Code Inspector Allegedly Prepares Fraudulent Federal Tax Returns For Customers Asserting Bogus Deductions

WASHINGTON, D.C. - The Justice Department announced today that it has asked a federal court to bar Anthony McBryde, of Norfolk, Virginia, from preparing federal income tax returns for others. The complaint in the civil injunction suit—filed yesterday in Norfolk with the U.S. District Court for the Eastern District of Virginia—alleges that McBryde prepares fraudulent returns for customers with frivolous “claim of right” deductions and other impermissible deductions. The Justice Department also seeks a court order requiring McBryde to provide the government his customers’ names, mailing and e-mail addresses, and telephone and Social Security numbers.

According to the complaint, McBryde, who is a City of Norfolk code inspector, concocts frivolous deductions for customers that fraudulently eliminate or reduce customers’ reported taxable income. He has allegedly prepared at least 187 returns containing deductions based on the claim of right doctrine, which courts have rejected as legally frivolous. He also allegedly claims deductions for non-deductible personal expenses, such as residential gas and electricity bills. The complaint alleges that McBryde prepares returns in the Hampton Roads area, including Norfolk, Suffolk, Chesapeake, Portsmouth, and Virginia Beach, charging customers a flat rate of approximately $60 to $130 per return.

“The Justice Department and the Internal Revenue Service are working energetically to halt the preparation and filing of false and fraudulent income tax returns,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “People who prepare returns claiming false deductions are cheating honest taxpayers and creating legal problems for their customers.”

This suit is part of an ongoing crackdown on preparers of false or fraudulent tax returns. More information about these cases is available at http://www.usdoj.gov/tax/taxpress2005.htm. The claim of right doctrine is number five on the IRS’s 2005 list of the “Dirty Dozen” tax scams, the complete list of which is available at: http://www.irs.gov/newsroom/article/0,,id=136337,00.html. More information about the Tax Division is available at http://www.usdoj.gov/tax/index.html