A federal court has barred a family of tax preparers in Overgaard, Ariz., from preparing federal tax returns for others, the Justice Department announced today. The court’s preliminary injunction order against Shelia Young, Deane Young, and Kennith Defoor will remain in effect while a related criminal case against the defendants proceeds in court.
The government complaint in the civil injunction case alleged that the Youngs and Defoor promoted fraudulent tax schemes through their companies, Accurate Consulting LLC, and D4 Accounting, Consulting, Tax Services Inc. According to the complaint, these schemes included manipulating the amount of income and federal tax withholdings claimed on their customers’ tax returns, resulting in bogus claims for tax refunds. The complaint further states that, since 2001, the Youngs and Defoor prepared at least 337 federal tax returns requesting fraudulent tax refunds, often in amounts exceeding $100,000.
The three family members allegedly prepared frivolous tax returns that cumulatively claimed more than $24 million in fraudulent refunds and resulted in the Internal Revenue Service (IRS) issuing approximately $2.3 million in erroneous refunds. The complaint alleged that the Youngs and Defoor asserted fraudulent “zero income” and “commercial redemption” tax schemes and regularly submitted false IRS forms on behalf of their customers that reported both fictitious interest income and tax withholdings.
The IRS described the zero income and commercial redemption schemes as frivolous in its publication The Truth About Frivolous Tax Arguments. Return preparer fraud, bogus refund claims based on frivolous arguments, and claims of zero wages are also three of the “Dirty Dozen” tax scams identified by the IRS for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department’s website.
Defendant/Respondent: Shelia Young, Deane Young, and Kennith Defoor
Criminal Charges: Promoting fraudulent tax schemes
City and State: Overgaard, Arizona
Exact Date: Not specified
Sentence or Outcome: Preliminary injunction order in effect while a related criminal case proceeds in court
Dollar Amounts: At least $24 million in fraudulent refunds and $2.3 million in erroneous refunds
This case is a reminder of the importance of tax preparers following the law and avoiding schemes that can cost taxpayers millions of dollars. We will continue to work with the IRS to protect the integrity of the tax system and ensure that those who engage in tax-related crimes are held accountable.
We urge taxpayers to be cautious when selecting a tax preparer and to report any suspicious activity to the IRS.
Related Federal Cases
- Two Tax Preparers, Tax Refund Fraud, Florida 2023 · Florida
- Willie Mitchell, Bank Fraud, Arizona 2023 · Washington
- Isrrael Millan, III, Conspiracy, Wire Fraud, Mail Fraud, Money Laundering, Arizona 2020 · Washington
- David Allen Harbour, Wire Fraud and Transactional Money Laundering, Arizona 2023 · Idaho
- Micaela Dutson and Tony Dutson, Tax Evasion and Harassment, Arizona 2008 · Florida
Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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