Federal Court Shuts Down Another Unscrupulous Tax Return Preparer

The injunction bars Magana and Genesis Bookkeeping from preparing tax returns for others

Federal Court Shuts Down Another Unscrupulous Tax Return Preparer
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April 21, 2016

A federal court entered a permanent injunction this week against Grandview, Washington tax return preparer Jose Magana and his business, Genesis Bookkeeping and Accounting.

According to the U.S. Department of Justice (USDOJ), the injunction bars Magana and Genesis Bookkeeping from preparing tax returns for others. Magana and Genesis Bookkeeping admitted in a court filing that they had interfered with the enforcement and administration of federal tax laws.

The United States' complaint states that Magana and his business have engaged in a pattern of claiming for their clients false or inflated dependency exemptions, inappropriate filing status, and false or inflated Child Tax Credits and Additional Child Tax Credits. Their practice of claiming these false exemptions and credits has resulted in significant lost tax revenues by understating tax liabilities and claiming improper refunds, according to the lawsuit.

Specifically, the suit alleges that, as of March 26, 2015, the Internal Revenue Service (IRS) had examined close to 300 tax returns that Magana and Genesis Bookkeeping and Accounting had filed from 2012 through 2014. Of those examined returns, over 95 percent had to be adjusted, with proposed deficiencies averaging approximately $3,150 per return, according to the complaint.

The lawsuit alleges that Magana and his business prepared and submitted a total of more than 10,000 tax returns from 2012 through 2014.

Return preparer fraud is one of the IRS's Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has also launched a free directory of federal tax preparers.

In the past decade, the USDOJ's Tax Division has obtained injunctions against hundreds of dishonest tax preparers.