UNITED STATES SUES NINE IN NATIONWIDE CRACKDOWN ON TAX-REFUND SCAM

WASHINGTON, D.C. - The Justice Department announced today that, in a nationwide crackdown against a tax-fraud scheme promoted by Peter Eric Hendrickson of Commerce Township, Mich., it has brought suit against nine people this week. According to the government complaints, filed in seven lawsuits across the country, the nine people—including Hendrickson and his wife Doreen M. Hendrickson—have received a total of nearly $150,000 in erroneous tax refunds by submitting false forms with their federal tax returns to replace W-2 and 1099 forms that correctly reported their income.

In seven suits filed in U.S. district courts in California, Nevada, Michigan, Alabama, Florida and Kansas, the Justice Department seeks to recover the erroneous refunds.  In addition, the suit against Hendrickson, filed in the Eastern District of Michigan, asks the court to enjoin him from filing false tax forms and returns.  A violation of the injunction would be punishable as contempt of court.

According to the complaint, Hendrickson claims that only government workers are subject to income taxes. Hendrickson tells people to not submit their W-2 and 1099 forms with their tax returns, and in their place submit substitute or corrected W-2 and 1099 forms that they create on which they change their reported income to zero. Under the scheme, people then submit the falsified forms with a tax return falsely reporting no income and request a refund of all taxes withheld from wages. This scheme is number one on the IRS’s 2006 list of the “Dirty Dozen” tax scams, posted at http://www.irs.gov/newsroom/article/0,,id=154293,00.html.

“Federal law provides serious penalties for filing false tax forms,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “People who engage in tax fraud schemes can expect to pay back taxes, plus interest and penalties, and may face criminal prosecution for evading taxes.”

The suit against Hendrickson alleges that he was convicted in 1992 on federal criminal charges for failing to file a federal income tax return and for a conspiracy involving a firebomb placed in a bin at a U.S. Post Office in Royal Oak, Mich. on April 16, 1990, the last day on which tax returns could be postmarked that year. Hendrickson testified at a co-conspirator’s trial that he wrapped a tea bag around the bomb’s tubing as a reference to the Boston Tea Party tax protest.

The seven people sued in addition to the Hendricksons are Sharon K. Artman of Largo, Fla.; Michael J. Dowling of San Diego; Joy M. Ferguson of Henderson, Nev.; Melvin L. Gerstenkorn of Topeka, Kan.; Larry B. Golson and Debra G. Golson of Montgomery, Ala.; and James A. Spitzer of Winter Park, Fla. Copies of all seven complaints will be posted with this press release today at http://www.usdoj.gov/tax/taxpress2006.htm.

This week’s suits are part of the IRS’s and Justice Department’s efforts against tax-fraud schemes. More information about these efforts can be found at www.usdoj.gov/tax/taxpress2006.htm. Information about the Tax Division can be found at www.usdoj.gov/tax/index.html.