Related Federal Cases
Liberty Tax Service Owner and Companies Charged with Tax Return Fraud
A shocking case of tax return fraud has been uncovered in Illinois, with a Liberty Tax Service franchise owner and his companies at the center of the scandal. Syed N. Ahmed, the owner of Nasah Inc., Millinium Financial Solutions Inc., Mars Inc.-Hamtramck, and Mahad Inc., has been accused of improperly obtaining inflated tax refunds and refundable credits for customers by preparing tax returns that include false or inflated Schedule C (Profit or Loss From Business) income and expenses, bogus dependents, false filing statuses, improper education credits, and false itemized deductions.
According to the complaint filed in the U.S. District Court for the Eastern District of Michigan, Ahmed operates at least 10 Liberty Tax Service franchise locations, and has prepared more than 17,000 federal income tax returns between 2010 and 2013. The Internal Revenue Service (IRS) has made audit adjustments to tax returns prepared and filed by Ahmed between 2010 and 2013, resulting in a loss of approximately $2.8 million to the U.S. Treasury.
The lawsuit alleges that defenders improperly obtain inflated tax refunds and refundable credits for customers by preparing tax returns that include false or inflated information. For example, one tax return preparer was accused of fabricating a driving business without the customer’s knowledge and reported thousands of dollars of expenses for that business that the customer did not incur. This enabled the customer to receive an earned income tax credit that she was not otherwise entitled to receive.
The suit also alleges that Ahmed and his companies have cost the U.S. Treasury approximately $2.8 million through their actions. The case highlights the importance of choosing a reputable and trustworthy tax preparer, and the risks of hiring a tax preparer who engages in fraud. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers.
The Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters in the past decade. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on the Tax Division’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.
The case serves as a reminder of the risks of tax return fraud and the importance of being vigilant when choosing a tax preparer. The public is encouraged to report any suspicious activity to the authorities. The Justice Department is committed to protecting the integrity of the tax system and will continue to take action against those who engage in tax return fraud.
Key Facts
- State: Illinois
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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