A federal court in the Eastern District of New York has permanently barred Brooklyn resident defendants Maria Cuervo and Danays Enterprises & Travel, Inc. from operating a tax filing business, including from their business at 2786 Atlantic Avenue, Brooklyn, New York . The defendants consented to the injunction. The court’s ruling also requires Cuervo to remit to the United States $150,000 in fees the government allegedly received as ill-gotten gains for preparing federal tax returns that made grossly incompetent, negligent, reckless or fraudulent claims.
Among the allegations in its complaint, the United States alleged that the defendants prepared customer tax returns that contained fraudulent filing statuses, including improper claims of head of household status. The United States also alleged that the defendants prepared tax returns alleging fraudulent dependant tax exemptions and losses intended to unduly reduce reported taxable income.
This was announced by Deputy Assistant Attorney General David A. Hubbert of the Department of Justice’s Tax Division.
Accountant tax fraud is one of the IRS’s Dirty Dozen Tax Scams, and taxpayers seeking an accountant should remain vigilant. (You can also find more information here.) The IRS has information on how to choose a tax preparer on its website, has created a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers who will be refused signatures A return should be a red flag for taxpayers. The IRS also has a list of important reminders for taxpayers about to file their 2020 returns, including preparing for a smooth filing process.
In addition, IRS Free File, a public-private partnership, offers free online tax prep and filing options on IRS partner websites for individuals whose adjusted gross income is less than $72,000. For individuals whose income is above this threshold, IRS Free File offers electronic federal tax forms that are free to fill out and file online.
Over the past decade, the tax department has obtained injunctions against hundreds of unscrupulous accountants. Information on these cases is available on the Department of Justice website. See this page for an alphabetical listing of those prohibited from preparing returns and promoting tax regulations. If you believe that any of the instructed individuals or entities may be in breach of an injunction, please contact the Tax Department with details.