Tax Preparer Busted in Eastern Washington

In a major blow to tax cheats, a federal court in Washington state has shut down a notorious tax return preparer who bilked the government out of millions of dollars in lost tax revenues.

Judge [Judge’s Name] entered a permanent injunction yesterday against Jose Magana and his business, Genesis Bookkeeping and Accounting, based in Grandview, Washington. The court order bars Magana and Genesis Bookkeeping from preparing tax returns for others, effectively putting an end to their nefarious scheme.

According to court documents, Magana and his business had engaged in a pattern of claiming false or inflated dependency exemptions, inappropriate filing status, and false or inflated Child Tax Credits and Additional Child Tax Credits for their clients. This practice has resulted in significant lost tax revenues by understating tax liabilities and claiming improper refunds, the complaint alleges.

As of March 26, 2015, the Internal Revenue Service (IRS) had examined close to 300 tax returns that Magana and Genesis Bookkeeping and Accounting had filed from 2012 through 2014. Over 95 percent of these examinations resulted in adjustments to tax, with proposed deficiencies averaging approximately $3,150 per return, according to the complaint. The suit alleges that Magana and his business prepared more than 10,000 returns from 2012 through 2014.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some 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.

Magana and Genesis Bookkeeping admitted in a court filing that they had interfered with the enforcement and administration of the federal tax laws. They agreed to entry of the injunction. The court’s decision sends a strong message to tax cheats that they will be held accountable for their actions.

The Tax Division has been cracking down on unscrupulous tax preparers in recent years. Information about these cases is available on the Justice Department 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.

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