Tax return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams, and the government continues its efforts to eradicate it. On November 13, 2023, the Department of Justice announced a federal court was permanently enjoining a Houston-area tax return preparer and her business from preparing federal tax returns for others.

In a complaint filed earlier this year, the government alleged that Crystal Ojeda prepared over 10,000 federal income tax returns during 2018-2023 from her business Money Market Tax Company LLC, as well as through two separate sole proprietorships: Money Market Financial Services and Money Market Financial. The complaint further alleged that in a substantial number of the tax returns, Ojeda overstated her customers’ tax refund amounts by fabricating or inflating business losses, medical and dental expenses, and charitable contributions. In addition, the government claimed that for some customers’ returns, Ojeda falsely claimed residential energy credits that her customers were not entitled to.

The complaint also alleged that by “repeatedly understating” her customers’ tax liabilities, Perry and her businesses cost the United States more than an estimated $4.8 million in tax revenue from 2022 to 2024. Ojeda and her tax return preparation business consented to a permanent injunction in an order entered against them on November 9.

Assistant Attorney General David A. Hubbert advised “Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers.” Notably, when the IRS identifies a false return, the taxpayer – not the return preparer – is generally responsible for paying any additional taxes and interest and may even be subject to penalties. This is generally the case even when a taxpayer claims no knowledge of false expenses, deductions, exemptions, or credits reflected on their tax return.

To combat the impact of return preparer fraud, the IRS offers resources including information on its website for choosing a tax preparer, a free directory of federal tax preparers, and information on how to avoid “ghost” tax preparers

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with federal investigations.  If you need assistance with such a matter, please contact us today.