Tax Preparer Barred in Alabama Scam

A federal court in Montgomery, Alabama, has permanently barred a tax preparer from preparing federal tax returns for others, the Justice Department announced today.

Jenika Williams, a tax preparer from Montgomery, Alabama, is alleged to have prepared returns that falsely claimed or inflated taxpayers’ income tax refunds by using social security numbers and other identifying information of third parties to falsely claim dependents in order to overstate the taxpayers’ claim to the Earned Income Tax Credit.

Williams, the suit alleges, previously pleaded guilty to conspiracy to defraud the United States, wire fraud and aggravated identity theft. Altogether, the loss to the U.S. Treasury from Williams’ activities may exceed $1 million.

The permanent injunction was entered by U.S. District Judge W. Keith Watkins for the Middle District of Alabama after Williams failed to respond to the lawsuit.

Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer.

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.

Williams’ actions are just the latest example of the risks of hiring an unscrupulous tax preparer. Taxpayers should be wary of anyone who promises unusually large refunds or asks for their social security number or other identifying information.

As part of its efforts to combat tax preparer fraud, the IRS has established a special section on its website devoted to information about unscrupulous tax preparers.

RELATED: Somerville Tax Man Gets 18 Months for Fake Returns

RELATED: Tax Fraud Pastor & Daughter Get Prison