Justice Department targeting dishonest tax preparers in Florida

FLORIDA — The Department of Justice (DOJ) urges taxpayers to choose their return preparers wisely as the April 18 federal tax filing deadline approaches.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams. Unscrupulous preparers who include errors or false information on a tax return could leave a taxpayer open to liability for unpaid taxes, penalties and interest.

“Taxpayers are responsible for what is on their return, even when it is prepared by someone else,” said Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division.

“If your preparer asks you to sign a blank return, will not let you review your return before filing it, or is depositing your refund in a way that is not clear to you, consult the IRS’s website to make sure you are not exposing yourself to trouble.”

Over the last year, the Tax Division has worked with U.S. Attorneys’ Offices around the country to bring civil and criminal actions against dishonest tax preparers, seeking civil injunctions to stop ongoing fraud, civil penalties or disgorgement of ill-gotten proceeds, and criminal penalties.

The Tax Division has also sought to strip fraudulent preparers of ill-gotten gains and to hold in contempt those who attempt to flout court-ordered restraints on further fraudulent activity. Over the last year, the division has brought these cases to court in Florida, according to the Justice Department:

• On Feb. 3, 2022, a federal court in the Southern District of Florida permanently barred Wendell Devallon, Berald Dominique and their business, Tax Time Group Inc., from preparing federal income tax returns in the future. The court also ordered defendants to disgorge $353,000 to the United States.
• On Sept. 29, 2021, a federal court in the Southern District of Florida required Milagros Espinal to pay $400,000 as a contempt sanction for violating the court’s February 2011 order that permanently barred Espinal from acting as a return preparer.

According to the Justice Department, criminal convictions against fraudulent preparers in Florida obtained by the Tax Division over the last year include:

• On March 22, 2022, Fred Pickett Jr., of Belle Glade, Florida, was sentenced to 97 months in prison after being convicted at trial of 22 counts of preparing false tax returns for his clients. According to evidence presented at trial, Pickett prepared tax returns for some of his clients claiming they owned fictitious businesses that lost tens of thousands of dollars each year.

The Tax Division reminds taxpayers that the IRS has information and tips on its site, see here and here, for choosing a tax preparer, has launched a free directory of credentialed 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 checklist of things to remember when filing income tax returns for tax year 2021.