Sharon D. Rhodes, Tax Return Preparer Fraud, North Carolina 2013

Local tax preparer Sharon D. Rhodes has been barred from preparing tax returns for others after a federal court in the Eastern District of North Carolina entered a permanent injunction against her.

According to the complaint, Rhodes prepared over 600 tax returns for the 2008 through 2010 tax years. The complaint alleges that Rhodes prepared returns claiming false charitable deductions and false credits such as the Earned Income Tax Credit and education credits.

Additionally, Rhodes allegedly understated her customers' federal tax liabilities by creating phony businesses and listing those fake businesses on returns and fabricating expenses and losses for them. The United States contended that the false items generated larger refunds for Rhodes' customers than they were entitled to receive, and that the losses to the U.S. Treasury could amount to as much as $3 million.

As part of the agreement, Rhodes consented to the entry of the injunction without admitting she was guilty of the allegations against her. The case is one of the IRS' Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013.

The IRS has tips for choosing a tax preparer, which can be found at www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional. In the past decade, the Justice Department's Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm.

Defendant: Sharon D. Rhodes

Criminal Charges: Preparing tax returns with false charitable deductions and false credits, and understating federal tax liabilities.

City and State: Eastern District of North Carolina

Date: 2013

Sentence: Permanent injunction without admission of guilt

Dollar Amount: Up to $3 million in potential losses to the U.S. Treasury

Source: https://www.justice.gov/archives/opa/pr/court-bars-nc-tax-return-preparer-preparing-returns-others