The United States has filed a complaint in the U.S. District Court for the Northern District of Illinois seeking to bar a Rockford-area tax return preparer from preparing federal income tax returns for others.
The civil complaint was filed against Gretchen Alvarez, aka Gretchen Trejo. The suit is also brought against defendant Sick Credit Repair Tax and Legal Services, which the complaint alleges is the name under which Alvarez sometimes does business. According to the complaint, Alvarez prepares federal income tax returns for Rockford-area taxpayers that significantly understate her customers’ tax liabilities by fabricating business losses. The suit also alleges that Alvarez fraudulently claimed that some of customers attended higher education institutions, when they did not, in order to fraudulently claim education credits on the returns she prepared.
In particular, the suit alleges that Alvarez fabricated money-losing “side businesses” to fraudulently reduce her customers’ legitimate taxable income. According to the complaint, the IRS has interviewed several of Alvarez’s customers, who allegedly stated that they did not operate the listed businesses or incur the business expenses reported on their returns, and did not give Alvarez any reason to believe that such businesses existed.
The complaint alleges that, by repeatedly understating her customers’ tax liabilities, Alvarez has caused the United States to lose substantial tax revenue. According to the complaint, the true scope of her activities is unknown because she does not sign the tax return as the paid preparer, nor does she provide her IRS-issued identification number on returns she prepares, as required by law.
Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.
In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronic federal tax forms that can be filled out and filed online for free.
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 Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found 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.
Official news published at https://www.justice.gov/opa/pr/justice-department-seeks-shut-down-illinois-tax-return-preparer
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originally published at Law - NORLY NEWS