Judy Grace Sellers, Tax Scam Promotion, Florida 2023
WASHINGTON – A Florida woman has been sued by the United States to stop her from promoting an alleged scheme involving fraudulent tax refund claims, the Justice Department announced today. The government’s amended complaint for a civil injunction alleges that Judy Grace Sellers, of Chipley, Fla., helps her customers create false documents to support a frivolous “Secured Party Creditor” argument.
According to the lawsuit, this argument maintains that the federal government has created a “strawman” for each U.S. citizen and an account exists at the Treasury Department for the strawman. Sellers allegedly assists her customers in preparing documents to obtain funds from their supposed Treasury accounts.
The scheme, also called the “commercial redemption” scheme, involves Sellers’s customers filing fraudulent tax returns with false Internal Revenue Service (IRS) Forms 1099-OID. The government alleges that the forms falsely claim huge amounts of tax withholding and that the returns claim large tax refunds based on the false withholding amounts.
Sellers’s customers have allegedly filed federal income tax returns claiming false refunds exceeding $6 billion. The amended complaint states that, in 2008, Sellers referred some customers to Teresa Marty for assistance with the Form 1099-OID submission process. The complaint alleges that, in 2009, the U.S. District Court for the Eastern District of California barred Marty from preparing federal tax returns for others as a result of her participation in the Form 1099-OID scheme.
Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s“Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice website.
The government alleges that Sellers’s actions are a serious threat to the integrity of the tax system and seek an injunction to stop her from promoting the scheme. The case is being handled by the Tax Division’s Washington, D.C. office.
Judy Grace Sellers, of Chipley, Fla., is the respondent in this case. The exact criminal charges brought against her are promoting a tax scam and assisting in the creation of false documents to support a frivolous “Secured Party Creditor” argument. The city and state where the crime took place are Chipley, Florida. The exact date of the crime is not specified in the source.
The outcome of this case is currently pending, and no sentence or fine has been handed down. However, the government has alleged that Sellers’s customers have filed federal income tax returns claiming false refunds exceeding $6 billion.
Key Facts
- State: Federal
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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