04/13/2009

News / Federal Court Bars Homewood, Illinois, Tax Preparers from Preparing Federal Tax Returns for Others

Complaint Alleges That Tax Preparer Inflated Deductions and Credits for Customers

WASHINGTON – U.S. District Court Judge Robert W. Gettlemen entered an order barring tax preparers, Michael J. Singleton and his wife, Ladonna Singleton, from preparing federal tax returns for others, the Justice Department announced today. The court’s ruling came after the Singletons failed to defend against the government’s allegations.

The government alleged in its complaint that the Homewood, Ill., couple operated a tax return preparation service under the name ITA Services Inc. The government’s complaint states the Singletons prepared approximately 700 federal income tax returns during the years 2005 through 2007, many of which claimed fabricated or inflated deductions for their customers resulting in an understatement of their clients’ tax liabilities. As part of the scheme to reduce their customers’ tax liabilities, some returns prepared under Mr. Singleton’s preparer tax identification number allegedly contained false Schedule C businesses and false Schedule E rental properties.

The court’s order also requires the Singletons to provide the government with a list of everyone for whom they have prepared or helped to prepare a federal income tax return for the income tax years 2005 through 2008. Additionally, they are required to mail a copy of the complaint and the injunction order to all persons or entities for whom they have prepared tax returns or other federal tax documents since January 1, 2006.

Acting Assistant Attorney General John DiCicco thanked Justice Department trial attorney Lisa Bellamy and Agent Peter Chlimon of the Internal Revenue Service’s Abusive Tax Avoidance Transaction Group in Chicago for their efforts in obtaining this injunction for the government.

In the past decade, the Justice Department’s Tax Division has obtained more than 380 injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department’s Web site, as is information about the Justice Department’s Tax Division.

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