A federal court in Salt Lake City has permanently barred Dick Jenkins, a CPA from Heber City, Utah, from preparing tax returns for others, the Justice Department announced last week. U.S. District Judge Dale A. Kimball entered the civil injunction order, finding that Jenkins requested more than $393 million in fraudulent income tax refunds for customers using "a tax fraud scheme that involves filing fraudulent federal income tax returns and other frivolous documents with the IRS on behalf of his customers." Judge Kimball also said, "[g]iven the sheer brazenness of Jenkins's conduct, he is essentially stealing (and attempting to steal) from the U.S. Treasury."
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The court found that Jenkins requested at least 20 fraudulent refunds using his tax scheme, which is based on the frivolous contention that secret accounts exist that can be accessed to pay these bogus refund claims. For example, court papers filed in the case alleged that Jenkins requested a single $210 million dollar fraudulent refund for one customer, and a $402,920 bogus refund for himself. At least $294,292 in fraudulent refunds were actually issued to Jenkins's customers. The court permanently barred Jenkins from preparing returns and providing any other tax-related services because "Jenkins's conduct results in irreparable harm to the United States."
On March 8, 2010, a Los Angeles court permanently shut down tax preparer Nyla McIntyre and her business, Approved Financial Services Inc., for using the same fraudulent scheme to claim over $23 million in bogus refunds for customers. On Jan. 4, 2010, an Idaho court shut down tax preparer Penny Lea Jones for using the scheme to claim $93 million in bogus refunds. And on Sept. 9, 2009, a Sacramento, Calif., court found that preparer Teresa Marty had been using the same scheme to generate bogus refunds for her customers, and permanently barred her from preparing tax returns for others.
In the past decade, the Justice Department's Tax Division has obtained more than 465 injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department's Web site.