Kevin Murphy, Tax Preparation Fraud, Texas 2023

Federal Prosecution Rocks Tax Preparation Industry in Dallas, Texas

The U.S. government filed a complaint in the U.S. District Court for the Northern District of Texas on December 12, seeking to bar a Dallas-area licensor of tax preparation businesses, Kevin Murphy, and his business, Umbrella Financial Services LLC, from franchising or licensing the tax preparation business and from assisting in the preparation of federal income tax returns for others.

According to the complaint, Kevin Murphy, through his tax preparation licensing business Umbrella Financial Services LLC, has had over one hundred licensees in a dozen states across the country. The complaint contends that some Umbrella Financial Services licensees have engaged in misconduct by preparing tax returns for customers, which report fictitious businesses, inflate business expenses for legitimate businesses, claim improper education credits, and report false income in order to claim inflated tax credits.

The complaint also alleges that Umbrella Financial Services improperly shared Electronic Filing Identification Numbers and that some preparers associated with Umbrella Financial Services did not use a properly assigned Preparer Tax Identification Numbers.

The complaint seeks an injunction against Ashley Fisher, Kevin Murphy’s business partner and Chief Knowledge Officer of Umbrella Financial Services, to bar her from preparing tax returns for others.

Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard their personal information.

In the United States v. Kevin Murphy, the federal government is seeking to shut down a tax preparation business that has allegedly facilitated over $100 million in fraudulent tax returns. The complaint, filed in the U.S. District Court for the Northern District of Texas, alleges that Kevin Murphy and his business, Umbrella Financial Services LLC, have engaged in a scheme to defraud the government by preparing and submitting false tax returns on behalf of their clients.

Deputy Assistant Attorney General David A. Hubbert of the Justice’s Tax Division made the announcement. The government is seeking a permanent injunction against Kevin Murphy and Umbrella Financial Services LLC, as well as a judgment that the defendants are liable for the costs of the lawsuit.

Mandatory Facts: Defendant/Respondent: Kevin Murphy, Umbrella Financial Services LLC; Exact Criminal Charges: Tax Preparation Fraud; City and State: Dallas, Texas; Exact Date: December 12, 2023; Sentence or Outcome: Ongoing case; Dollar Amounts: Over $100 million in fraudulent tax returns.

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