A federal court in the Northern District of Mississippi has permanently enjoined a Senatobia, Mississippi, tax return preparer from preparing returns for others and from owning, operating, or franchising any tax return preparation business in the future.
According to the court’s order, Kathy R. Moton and K&M Tax Essentials LLC consented to entry of the injunction, which permits the United States to conduct full post-judgment discovery to monitor compliance. The terms of the order require that Moton and K&M Tax Essentials send notice of the injunction each person for whom they prepared federal tax returns, other tax forms, or claims for refund after Jan. 1, 2018, and to advertise the injunction on social media for one year. The civil complaint filed against defendants alleged that their fraudulent activities resulted in a loss to the Treasury of over $1 million.
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.