KANSAS FEDERAL COURT BARS FATHER AND DAUGHTER FROM PREPARING TAX RETURNS FOR OTHERS

Wichita-Based Father and Dallas-Based Daughter Allegedly Claim Bogus Deductions

WASHINGTON, D.C. - The Justice Department announced today that a federal court in Wichita, Kansas, has permanently barred Harrold E. Jones and Evelyn Johnson from preparing tax returns for others. The civil complaint alleged that the father-and-daughter team—that do business as Evelyn’s Secretarial and Tax Service—have repeatedly created fictitious businesses that they have used to fraudulently inflate customers’ tax deductions. The injunctions, to which the two defendants consented, also require Jones and Johnson to give the Justice Department a list of their customers’ names, addresses, e-mail addresses, phone numbers, and Social Security numbers. The defendants also must notify their customers of the injunction.

According to the complaint filed in the case last month, the Internal Revenue Service (IRS) audited a sample of more than 5,000 customer returns that Jones and Johnson prepared for tax years 1999 through 2003. The complaint states that 97 percent of the audits resulted in additional taxes owed. False and fraudulent returns the pair prepared have cost the federal treasury more than $12 million, according to an IRS estimate contained in the complaint. Jones has been preparing tax returns for about 50 years. According to papers filed in the case, Jones and Johnson improperly used other return preparers to file returns for them in order to avoid detection by the IRS. A copy of the government complaint is available at http://www.usdoj.gov/tax/txdv06077.htm.

This case is part of the Justice Department’s initiative to stop the promotion of tax-fraud schemes. Since 2001, the Justice Department has sought and obtained injunctions against more than 150 tax-scam promoters and preparers of false or fraudulent returns. Information about these cases is available at http://www.usdoj.gov/tax/taxpress2006.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax/index.html.