Justice Department Seeks to Shut Down Mississippi Return Preparer

The United States filed a complaint in the U.S. District Court for the Southern District of Mississippi seeking to bar a Mississippi tax return preparer from owning or operating a tax return preparation business and preparing tax returns for others.

The civil complaint was filed against Terance Price, both individually and doing business as Superior Taxes. It alleges that Price knowingly took unreasonable positions on returns he prepared that led to understatements of the tax customers owed or overstatements of the refunds to which they were entitled to receive. In particular, the complaint alleges that Price prepared returns that claimed residential energy credits, fuel tax credits, or unreimbursed employee business expenses that he knew were false. According to the complaint, the IRS has assessed penalties against Price for failing to comply with due diligence requirements that obligate a tax return preparer to make reasonable inquiries to ensure that a customer is legitimately entitled to various tax credits, including the earned income tax credit. The complaint alleges that Price has not paid the penalties incurred for past violations of those due diligence requirements.

The complaint further alleges that Price filed hundreds of tax returns each filing season since 2015, the year in which he began operating his tax preparation business, and that he has filed tax returns using other tax preparers’ personal identifying information. According to the complaint, the potential tax losses from the returns that Price prepared for tax years 2017 and 2018 could exceed $1 million, and actual losses from his activities could surpass that estimate. In addition, the complaint alleges that Price’s conduct harms his customers, who are responsible for these tax deficiencies and, potentially, interest and penalties.

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 electronical 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.

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