Federal Court Shuts Down New York Area Tax Preparation Company | Takeover bid
A federal court in the Eastern District of New York has permanently barred Brooklyn-based defendants Maria Cuervo and Danays Enterprises & Travel, Inc. from operating a tax preparation business, including from their store at 2786 Atlantic Avenue, Brooklyn, New York. The defendants consented to the permanent injunction. The court ruling also demands that Cuervo return to the United States $150,000 in fees the government claims it received as ill-gotten gains for preparing federal tax returns that make grossly incompetent, negligent, reckless claims. or fraudulent.
Among the allegations in its complaint, the United States alleged that the defendants prepared the clients’ tax returns, which disclosed fraudulent filing statuses, including abusive claims of head of household status. The United States further alleged that the defendants prepared tax returns claiming fraudulent dependent exemptions, as well as losses intended to improperly reduce reported taxable income.
Assistant Deputy Attorney General David A. Hubbert of the Justice Department’s Taxation Division made the announcement.
Tax preparer fraud is one of the IRS frauds Dirty dozen tax scams and taxpayers looking for a tax preparer should stay alert. (More information can also be found here.) The IRS has information about its website for the selection of a tax preparer, launched a free directory federal tax preparers and provides information on how to avoid “ghost” tax preparers, whose refusal to sign a declaration should be a wake-up call for taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax return, including how to prepare for a smooth filing process.
In addition, IRS Free File, a public-private partnership, provides free online tax preparation and filing options on partner IRS websites for individuals with adjusted gross incomes below $72,000. For people with income above this threshold, IRS Free File offers electronic federal tax forms that can be completed and filed online for free.
Over the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information on these cases is available on the Ministry of Justice website. An alphabetical list of persons prohibited from preparing returns and promoting tax schemes can be found on this page. If you believe any of the individuals or companies being ordered may be violating an injunction, please contact the Tax Division with details.