JUSTICE DEPARTMENT SUES OKLAHOMA TAX RETURN PREPARER

Suit Alleges that Man Prepared Fraudulent Tax Returns Using Abusive Trust Schemes

WASHINGTON, D.C. -- The Department of Justice today filed suit in federal court in Tulsa, Okla., to stop Charles R. Chung of Broken Arrow, Okla., from preparing federal tax returns. In suit papers filed in the U.S. District Court for the Northern District of Oklahoma, the Department alleges that Chung prepares tax returns using abusive trust schemes to enable customers to hide taxable income, evade self-employment taxes, and claim impermissible or fictitious deductions.

According to suit papers, Chung has conducted business under the names Chung's Tax Plus, Parakletos, L.L.C., Parakletos Trust, Parakletos Professional Services, Parakletos Professional Services, L.L.C., and Phikar, L.L.C. The government estimates that Chung-prepared returns cost the U.S. Treasury more than $6 million from 1997 to 2001.

"Tax return preparers who get involved in tax-evasion schemes will be held accountable," said Eileen J. O'Connor, Assistant Attorney General for the Tax Division at the Department of Justice. "The Justice Department will take the actions necessary to stop unscrupulous return preparers who cheat all honest taxpayers and tax advisers who play by the rules."

Today's suit is the latest in a series of recent court actions brought by the Justice Department to shut down fraudulent tax return preparers. More information concerning recent suits against other preparers is available at: http://www.usdoj.gov/tax.

Although tax evasion schemes, including fraudulent tax return preparation, have cost taxpayers billions of dollars in the past, a report issued by the General Accounting Office in May 2002 indicates that stepped-up efforts by the IRS and Justice Department to crack down on scam promoters have led to increasing numbers of convictions. The report is available online at: http://www.gao.gov/new.items/d02733.pdf.

For copies of documents filed in this case and for information on other tax scam enforcement actions, go online to http://www.usdoj.gov/tax/taxpress2003.htm.

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