A Delaware woman is at the center of a massive tax return scam that has cost the U.S. Treasury up to $25 million in lost income tax revenue. Carmen J. Martinez, owner of CJM Bookkeeping and Taxes LLC in Wilmington, has been accused of preparing false tax returns for over 7,800 customers since 2010.
The U.S. District Court for the District of Delaware has filed a civil lawsuit against Martinez and her business, alleging that they understated customers’ federal tax liabilities by including false deductions. This resulted in customers receiving an average tax refund of $5,000 each year.
The Justice Department claims that Martinez’s activities between 2010 and 2013 have caused significant financial losses to the U.S. Treasury. The lawsuit seeks to enjoin Martinez and her business from preparing federal tax returns.
Return preparer fraud is listed as one of the IRS’s Dirty Dozen Tax Scams for 2013. The IRS has provided tips on their website for choosing a reliable tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.
According to the complaint, Martinez and her business have prepared tax returns that contain false deductions, including unqualified dependents, the Child Tax Credit, the Additional Child Tax Credit, and tax rate benefits derived from improper filing status as Head of Household or Married Filing Jointly.
The case against Martinez is a stark reminder of the importance of choosing a trustworthy tax preparer. As the IRS warns, choosing a reliable tax preparer can help prevent financial losses and ensure accurate tax returns.
The Justice Department has a long history of taking action against unscrupulous tax preparers. In the past decade, hundreds of tax preparers have been held accountable for their actions.
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Key Facts
- State: Delaware
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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