The Perfecting Church

[Demosthenes]

FOR IMMEDIATE RELEASE TAX
THURSDAY, SEPTEMBER 22, 2011 (202) 514-2007
http://WWW.JUSTICE.GOV TTY (866) 544-5309

JUSTICE DEPARTMENT SEEKS TO SHUT DOWN MICHIGAN PROMOTERS
OF ALLEGED TAX FRAUD SCHEME

Detroit-Area “Diamond Tax Services” Allegedly Claimed More Than $29 Million
in Fraudulent Tax Refunds

WASHINGTON – The United States has asked a federal court in Detroit to bar Damian Jackson and his wife, Holly Jackson, from preparing federal tax returns for others, the Justice Department announced today. According to the government complaint, the civil injunction lawsuit also seeks to bar the Jacksons, of Sterling Heights, Mich., and a third defendant, Tammy Daniels, an attorney from Farmington Hills, Mich., from promoting an alleged tax-fraud scheme.

According to the complaint, the Jacksons and their business, Diamond & Associates Enterprises LLC, along with Daniels, operate “Diamond Tax Services” and promote a scheme involving the preparation of fraudulent federal income tax returns for customers seeking large tax refunds based on a frivolous theory called “redemption” or “commercial redemption.” The complaint alleges that Damian Jackson, a minister at the Perfecting Church in Detroit, prepares tax returns that claim huge fraudulent refunds based on fabricated income-tax withholding reported on false Internal Revenue Service (IRS) Forms 1099-OID. The complaint further alleges that Holly Jackson transmits the false forms to the IRS. Damian Jackson allegedly became acquainted with a significant percentage of his customers, which include a fellow minister, through the Perfecting Church.

According to the complaint, the IRS catches most frivolous refund requests before refunds are issued, but the defendants’ scheme has caused the IRS to issue at least $1.6 million in erroneous refunds to the defendants’ customers. Federal tax returns prepared under the auspices of Diamond Tax Services have allegedly sought more than $29 million in fraudulent refunds for more than 180 customers, and the Jacksons allegedly requested $2.5 million in bogus refunds on their personal tax returns, according to the complaint.

In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.

[Judge Roy Bean]

I'm wondering about the efficacy of the whole civil suit/injunction process in these cases. I understand the idea of peremptory strike to perhaps interfere with an on-going criminal enterprise and even recognize that more time may be required to obtain an indictment, but it would seem to me arrests with the media in tow and appearances in jail garb for arraignment would have a more profound effect.

As it is now, they have time to maneuver - and may have the resources to flee.