Michelle Cole Theus, Tax Return Fraud, Tennessee 2016

Michelle Cole Theus, a LaVergne, Tennessee resident and owner of Cole Tax Services, has been barred from preparing federal tax returns after allegedly scamming her customers out of nearly $800,000 in refunds.

The court’s injunction, issued without Theus admitting or denying the allegations, forbids her from preparing federal tax returns or operating a return-preparation business. Theus must also turn over a complete list of her customers to the government.

According to the United States’ civil complaint, Theus initially prepared accurate returns for her customers, but then began fraudulently increasing the returns’ claimed refund by adding fictitious dependents or false education credits. Theus then caused the fraudulently inflated portion of the refund, or sometimes the entire refund, to be deposited to her own bank account.

The Internal Revenue Service estimates that Theus has claimed at least $788,220 in fraudulent refunds, according to the complaint.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice 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. The public is urged to remain vigilant and report any suspicious activity related to tax preparers.

Michelle Cole Theus’s actions are a stark reminder of the importance of choosing a reputable tax preparer. The Grimy Times urges all citizens to be cautious when selecting a tax preparer and to report any suspicious activity to the authorities.

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