Scammer Enjoined Over 1099-OID

[The Observer]

BNA Daily Tax Report
November 2, 2011

Tax Fraud: DOJ Asks Court to Shut Down Tax Preparer Over $13 Million Alleged Redemption Fraud

By Nora Macaluso

LANSING, Mich.—The Department of Justice Nov. 1 asked a federal court to block a Detroit tax preparer from filing federal tax returns for others, alleging that he falsified income tax information on at least 45 returns and sought more than$13 million in fraudulent refunds for customers (United States v. Brown, E.D. Mich., No. 2:11-cv-14783, complaint filed 11/1/11).

The civil suit alleges Carlos Brown and his business, Express Finance and Processing Services, fabricated withholding information on IRS Forms 1099-OID, and asks the court to order Brown to provide a list of all returns filed since 2008. One customer allegedly sought a refund of more than $1.75 million.

According to the government, Brown received compensation for preparing and filing “frivolous documents and fraudulent federal tax returns” covering tax years 2005, 2006, and 2007.

The claims are based on a “frivolous tax-definer theory” known as redemption or commercial redemption, which contends that the government maintains a secret account for each taxpayer that can be used to satisfy debts including tax liabilities, the government said.

The IRS listed the filing of false or misleading tax returns as one of its “dirty dozen” tax scams for 2011 (68 DTR G-3, 4/8/11).

[wserra]

Thread title: Scammer Indicted over 1099-OID.

Thread text:

...
The Department of Justice Nov. 1 asked a federal court to block a Detroit tax preparer from filing federal tax returns for others ... The civil suit alleges

It's an action for an injunction, not an indictment.

[LPC]

It's an action for an injunction, not an indictment.

Darn.

[AndyK]

Injunctions are fast and relatively easy for DOJ -- they've had a lot of practice and aren't losing many these days. No jury involved, just the law, the facts, and the judge vs. a (usually pro se) knowingly wrong party.

Injunctions do not preclude follow-on criminal actions.

[The Observer]

Thread title: Scammer Indicted over 1099-OID.

Thread text:

...
The Department of Justice Nov. 1 asked a federal court to block a Detroit tax preparer from filing federal tax returns for others ... The civil suit alleges

It's an action for an injunction, not an indictment.

Mea culpa. I went back and corrected my topic header.