An injunction can prohibit a preparer from filing federal tax returns for others. We generally reserve this targeted treatment for cases when earlier compliance efforts failed.
This process allows the Department of Justice to shut down preparers when we identify a history of problems. We pursue injunctions against preparers with a history of not meeting due diligence requirements, including:
- Previous due diligence and other return preparer penalties
- Prior e-file warnings or suspensions
- A high percentage of clients whose EITC claims were reversed or reduced by IRS
- Questionable EITC and other refundable credit claims
- Non-compliance related to preparer's personal or business tax returns
These preparers could also face criminal prosecution and/or additional penalties.
Cost to Government and Taxpayers
With this process, we can stop return preparers who are costing the government and taxpayers a great deal of money in EITC overpayments. The preparers listed below were each permanently barred from preparing federal tax returns for others. Returns filed by these preparers resulted in over 120 million dollars in harm to the government and taxpayers.
EITC Due Diligence Injunction Results
Department of Justice news releases announced injunctions against return preparers all involving EITC Due Diligence violations.
A federal court permanently barred Teresa Chism of Durant, Mississippi, from preparing federal tax returns for others. According to the government’s civil complaint, Chism, who operated her business as Lady T. Taxes, prepared federal income tax returns that fraudulently overstated her customers’ claims for refunds. The complaint alleged she did so by claiming refundable credits, including the EITC and credits for education expenses, that her customers either were ineligible to receive, or were not entitled to receive in the amounts claimed on the returns. It also alleged Chism frequently fabricated Forms W-2 and submitted them with a tax return as evidence of a customer’s eligibility for the EITC. Read more about the Chism injunction here.
- A federal court permanently barred Nathaniel Kimble, of Greenville, Mississippi, and his Greenville, Mississippi, business, Kimble Tax Service, from preparing federal tax returns for others. The complaint also alleged that Kimble knowingly prepared federal income tax returns for customers that understated the customers’ tax liability and overstated refunds they claimed by inflating or fabricating earned income tax credits that his customers were not eligible to take. (January 22, 2015) Read more about the Kimble injunction here.
- A federal court permanently barred Kavivah Branson, aka Kavivah Bradley, of Clinton, Mississippi, and her Jackson, Mississippi, business, Branson Tax Service, from preparing federal tax returns for others. The complaint also alleged that Branson claimed improper earned income tax credits and education credits for her customers without performing the required due diligence and despite the absence of any supporting documentation, leading to the understatements. (July 3, 2014) Read more about the Branson injunction here.
- A federal district judge in Indianapolis permanently barred Cynthia Hawk, who operates Gain Tax Services, from preparing federal income tax returns for others. The government's complaint alleged that Hawk prepared at least 1,501 returns from 2009 through 2012, and that returns Hawk prepared claimed refunds at an unusually high percentage, ranging from 96 to 99 percent during these years. The government alleged that Hawk failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on customers’ income tax returns. (July 31, 2013) Read more about the Hawk injunction here.
- A federal court permanently barred Crystal Ireland, of Detroit, who does business as Master Mind Preparation, from preparing federal tax returns that claim the earned income tax credit. Ireland failed to comply with due diligence requirements imposed by federal law on tax preparers who claim the earned income credit on customers’ returns. According to the complaint, Ireland fabricated businesses and reported fake business income on her customers’ tax returns to claim the maximum credit for them. (March 14, 2013) Read more about the Ireland injunction here.
- Federal court enjoined Torrey Burden and any other person or entity working in concert with Burden to neither (1) prepare, file, or assist the preparation or filing of a federal tax return for another person or entity nor (2) provide for compensation tax advice or a tax service, including tax consulting or representing a person in a matter before the Internal Revenue Service. (April 16, 2013) Read more of the Burden injunction on the Department of Justice website.
- Federal court permanently barred Yonny Torres, who does business under the name Yonny's Income Tax in downtown Los Angeles, from preparing federal tax returns. Torres received the;civil injunction, for engaging in "dishonest conduct" when preparing federal income tax returns that contained false information that increased his clients' earned income credit (EIC) so their tax refunds would be fraudulently inflated. (April 23, 2013)
- Federal court permanently bars Lakeisha Pearson of Birmingham, Alabama from preparing federal tax returns for others. Pearson received the injunction for continually preparing federal tax returns she knew or should have known were not eligible to claim EITC and for not meeting her EITC due diligence requirements. Pearson operated under these business names: LGS Tax Service, Positive Endeavors LLC, and AGA Tax Service. (January 27, 2012).
- Federal court permanently barred Carmen Gonzalez from preparing federal tax returns for others. Gonzalez consented without admitting wrongdoing to the civil injunction order. Gonzalez, of Allentown, PA. formerly owned and operated Carmen Tax Services in New Brunswick, N.J. (December 15, 2011)
- Federal court permanently barred Luvander Hollaway from preparing federal tax returns for others. Hollaway is a resident of Newark, N.J (October 17, 2011)
- Federal court permanently barred Cecil A. Collier of Georgia from preparing federal tax returns for others. Collier worked under the trade name Cairo Fast Tax. (July 7, 2011)
- Federal Court Permanently Bars Endia Delores Nipper, Jessie Mackie and their business, TDNS Tax Service located in Augusta, GA from preparing federal income tax returns for others and from operating their tax preparation business. (May 27, 2011)
- Federal Court Permanently Bars Sony Ducasse of Greenacres, Florida from Preparing Tax Returns for Others (January 12, 2011)
- Federal Court Bars Maritza Villanueva of Irving, Texas from Preparing Tax Returns (December 14, 2010)
- Federal Court in Atlanta Permanently Bars Saloum A. Njie and his company, MIAAS Associates LLC from Preparing Tax Returns for Others (August 24, 2010)
- Federal Court Bars Ludivina Salinas of Mission, Texas from Preparing Tax Returns (October 6, 2009)
- Consequences of Failing to Meet Your Due Diligence
- Refundable Credit Preparer Compliance - Focused and Tiered