FEDERAL COURT PERMANENTLY BARS SEATTLE-AREA MAN FROM PREPARING TAX RETURNS

Defendant Conducted Business as “The Tax Clinic”

WASHINGTON, D.C. - The Justice Department announced today that a federal court has barred Ronald M. Paul, of Kent, Washington, from preparing federal tax returns. The court also barred Paul, who operated under the name “The Tax Clinic,” from advising customers concerning federal taxes or representing customers in IRS proceedings.

In court filings, the government alleged that Paul prepared tax returns that claimed fictitious deductions – including fictitious business losses and charitable contributions – and made frivolous claims for refunds under a baseless “claim of right theory.” It also alleged that Paul had counseled his customers to impede IRS tax examinations. The Justice Department contended that taxpayers filing returns Paul prepared collectively understated their correct tax liability by more than $1.5 million.

“People who prepare false or fraudulent tax returns cheat their customers and unfairly shift the tax burden to honest American taxpayers,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice and the Internal Revenue Service are working vigorously to stop their systematic abuses of the tax system.”

Kristin H. Landis, a trial attorney with the Tax Division of the Justice Department, represented the government in this case, following an investigation by the Internal Revenue Service’s Small Business/Self-Employed Division.

The government has obtained numerous injunctions against return preparers who prepare false or fraudulent federal tax returns. Information about these cases is available on the Justice Department website at http://www.usdoj.gov/tax/taxpress2005.htm and http://www.usdoj.gov/tax/taxpress2004.htm. Further information regarding the frivolous “claim of right theory” can be found at http://www.irs.gov/irb/2004-12_IRB/ar12.html. More information about this case is available at http://www.usdoj.gov/tax/txdv04262.htm and http://www.usdoj.gov/tax/txdv04648.htm.