U.S. Asks Courts in California & South Carolina to Shut Down Promoters of Allegedly Fraudulent $39.2 Million Tax Refund Scam

The U.S. Department of Justice reports in its press release (quotation, not an independent finding): “WASHINGTON — The United States has sued tax return preparers in Placerville, Calif., and Columbia, S.C., seeking to bar them from preparing federal tax returns for others, the Justice Department announced today. According to the government complaints in the two cases, Teresa Marty of Pollock Pines, Calif., and Winston Able of Blythewood, S.C., prepare federal income tax returns for their customers that claim fraudulent tax refunds. The government alleges that Marty prepared one tax return claiming a $2.7 million fraudulent refund for one customer. The complaints allege that Able and Marty both employ a tax fraud scheme that uses fabricated IRS Forms 1099-OID to report fictitious tax withholding on their customers’ returns and then claim refunds of huge amounts. The complaints against Marty and Able allege that the scheme is part of a growing trend among tax protesters to file frivolous tax returns and forms in an attempt to escape their federal tax obligations and steal from the U.S. Treasury. The complaints allege that while the IRS detects and stops most fraudulent refund claims, Marty’s fraudulent tax return preparation has resulted in the IRS’s issuance of at least $6.9 million in erroneous payments to her customers. The government alleges that the total amount of fraudulent refunds requested on the returns Marty prepared or filed in 2008 was approximately $26.2 million and the total amount of fraudulent refunds requested on the returns Able prepared or filed was over $13 million. Customers who participate in this tax fraud scheme may be subject to sizeable penalties fo”