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South Florida Tax Return Preparers Hit with Federal Lawsuit
Three related tax return preparers in South Florida have been accused of filing false tax returns for their customers, causing the United States to lose substantial tax revenue. Fred Pickett Jr., Jalisa Steele, and Fred Pickett III, all of Belle Glade, Florida, operate a tax return preparation business under the names of Five Star Tax Services, Five Star Financial, and Millenium [sic] Tax Professionals.
According to the complaint filed in the Southern District of Florida, the business has prepared over 8,000 returns since 2011 from store locations in Belle Glade, Clewiston, Moore Haven, and La Belle, Florida. The defendants allegedly underreported tax liabilities and claimed bogus refunds on behalf of their customers by misreporting income, deductions, and credits on their tax returns.
The complaint alleges that the defendants fabricated businesses and business-related profits or losses, manipulated, maximized, or falsely claimed the Earned Income Tax Credit (EITC), and claimed false education credits. They also allegedly claimed spurious fuel tax credits, fabricated retirement account contributions and deductions, and failed to provide customers with complete copies of their tax returns.
One alleged example of such conduct involves a married couple whose tax returns were prepared by Pickett Jr. The complaint states that unbeknownst to the couple, Pickett Jr. reported a fake equipment business on their joint 2013 and 2014 tax returns, with combined losses that exceeded $90,000. These bogus losses, along with other retirement account-related fabrications, caused the couple to receive significantly inflated refunds each year.
The Internal Revenue Service (IRS) audited 55 tax returns prepared by the defendants and determined that each resulted in a deficiency with an average tax deficiency of $5,891 per return and a total revenue loss of $323,986.
The Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers in the past decade. The public can find information about these cases on the Justice Department’s website. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Key Facts
- State: Florida
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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