Source: United States Department of Justice News
A federal court in the Southern District of Florida has ordered a return preparer operating in the West Palm Beach area to pay $213,500 in fees he received for preparing tax returns in violation of a permanent injunction that barred him from filing, preparing, or helping to prepare federal tax returns for others.
The United States sued Nate E. Dameus, doing business as Mobile Tax Express Services, in May 2021. The Government’s complaint alleged that Dameus prepared returns for customers that fraudulently understated the tax those customers owed and/or overstated the refund to which they were entitled. The complaint alleged, for example, that Dameus prepared returns with fabricated tax withholdings and bogus claims for unreimbursed employee business expenses like car mileage, tools, cell phone services and meals. In addition, the complaint alleged that Dameus routinely falsified home improvement expenses on his customers’ returns to claim residential energy credits his customers were not entitled to receive. With Dameus’ consent, the court issued an injunction in September 2021 that permanently barred him from preparing tax returns for others.
The United States filed a motion on July 26, 2022, asking the court to hold Dameus in contempt for violating that injunction. According to the motion, Dameus used the Preparer Tax Identification Number assigned to his cousin, Fedson Dameus, to covertly prepare at least 305 tax returns for customers in 2022 in violation of the injunction. The motion also alleged that at least some of those returns reported fictitious business and “other income” losses, and false employer credits for paid family and medical leave. Before the scheduled hearing on the motion, Dameus stipulated that the United States could prove that those facts by clear and convincing evidence consented to an order finding him in contempt for continuing to prepare returns in violation of the injunction and agreed to pay $213,500. The court entered the order holding Dameus in contempt on Sept. 29, 2022. In addition to ordering Dameus to surrender ill-gotten fees, the court ordered him to reimburse the government for the costs incurred to investigate his violations and enforce the injunction.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a checklist of things to remember when filing income tax returns in 2022.
In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $73,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free. The IRS has tips on how seniors and individuals with low to moderate income can get other help or guidance on tax return preparation, too.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.