March 22, 2021 - The United States has filed a complaint in the U.S. District Court for the Eastern District of California seeking to bar a Visalia, California tax return preparer from owning or operating a tax return preparation business and preparing federal income tax returns for others.

The civil complaint was filed against Esther Oregon both individually and doing business as “Mex Tax Service,” which the complaint alleges is a sole proprietorship. The complaint alleges Oregon and Mex Tax Service prepared federal income tax returns for taxpayers that underreported their customers’ federal tax liabilities for the 2017 and 2018 tax years by including, among other things, inflated or false claims for tax credits, itemized deductions, and income or business expense deductions.

According to the complaint, defendants prepared over 3,600 tax returns in aggregate for tax years 2017 and 2018. The complaint alleges that the IRS interviewed certain customers of Oregon and/or Mex Tax Service about their 2017 and 2018 tax returns and calculated, based on those interviews, an average underreporting of $4,120 per return in 2017 and $2,714 per return in 2018. According to the complaint, the estimated total direct harm to the Treasury, based on those calculations, exceeds $6.9 million.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers.  The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Source: DOJ