Syed N. Ahmed, Tax Return Fraud, Michigan 2023

A federal court in Michigan has permanently barred a man and his companies from preparing federal tax returns after they were found to have prepared returns with false information to generate higher refunds.

Syed N. Ahmed and his companies, which operated at least 10 Liberty Tax Service franchise locations in the Detroit, Michigan, and Chicago, Illinois, areas, have been permanently barred from acting as federal tax return preparers and from owning, operating, or profiting from tax-return preparation businesses.

The civil injunction order, which was entered on an agreed basis by Ahmed and his companies, prohibits them from preparing federal income tax returns for others. According to the complaint, Ahmed and his businesses prepared 17,759 federal income tax returns between 2010 and 2013, which contained false information in order to illegally generate higher tax refunds or higher refundable credits for their customers.

The complaint alleged that the defendants improperly obtained inflated tax refunds and refundable credits for customers by preparing tax returns that included, among other things, 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.

The lawsuit further alleged that the defendants’ conduct cost the U.S. Treasury $2.8 million, based on audit adjustments the Internal Revenue Service (IRS) made to tax returns for 2010 to 2013 prepared and filed by Ahmed’s Liberty Tax Service franchises. The total harm to the government could be much higher, the complaint states.

The permanent injunction is a result of a civil lawsuit brought by the Justice Department against Ahmed and his companies. Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015.

The IRS has some tips for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. 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 this page.

If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Mandatory Facts:

Defendant/Respondent Name: Syed N. Ahmed

Criminal Charges: Permanently barred from preparing federal tax returns

City and State: Detroit, Michigan

Exact Date: Not specified in the source

Sentence or Outcome: Permanently barred from preparing federal tax returns

Dollar Amounts: $2.8 million

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