Chicago Tax Preparer Accused of Tax Fraud

The United States filed a lawsuit today to bar Barbara L. Garrett, a Chicago tax return preparer, from preparing federal tax returns for others, the Justice Department announced.

The civil injunction suit alleges that Garrett, while working at multiple Chicago-area tax preparation businesses including Instant Tax Service, Preferred Financial and Income Tax Solutions, claimed fraudulent deductions and credits on her customers’ federal tax returns.

According to the complaint, Garrett prepared tax returns that falsely claimed deductions from fake businesses. In one case, the complaint alleges that Garrett prepared two tax returns for a Chicago Transit Authority bus driver that reported over $25,000 in combined losses from a non-existent transportation company Garrett asserted her customer owned.

The customer did not own a transportation business, according to the complaint, or in fact any business, during the years Garrett prepared these returns.

Garrett also allegedly prepared tax returns for clients that included a number of other false or improper deductions for unreimbursed employee expenses, charitable contributions, medical expenses, childcare expenses, property taxes and education expenses.

One example cited in the complaint includes a fake claim for childcare expenses which falsely identified Garrett as the childcare provider. In another example, Garrett allegedly claimed over $13,000 in fictitious medical expenses and over $2,200 in bogus property tax deductions on the same return.

The case against Garrett is one of many recent efforts by the Justice Department to crack down on tax return preparer fraud. In the past decade, the department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.

Defendant: Barbara L. Garrett

Criminal Charge: Tax fraud

City and State: Chicago, Illinois

Exact Date: 2024

Sentence: Pending

Dollar Amounts: Over $25,000 in combined losses, $13,000 in fictitious medical expenses, and over $2,200 in bogus property tax deductions

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