The Justice Department announced this week that a federal court has permanently barred Linda Hendrieth, of Memphis, Tennessee, from preparing income tax returns or claims for refunds.
The final judgment, requires Hendrieth to notify her customers of the judgment and to provide to the government the names, addresses, and taxpayer identification numbers of her customers.
"People who prepare false or fraudulent tax returns cheat their customers and unfairly shift the tax burden to honest American taxpayers," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division. "The Department of Justice and the Internal Revenue Service are working vigorously to stop their systematic abuses of the tax system."
Hendrieth operates Taxing Solutions Plus, Inc., a Memphis-based tax return preparation business. The government alleged that Hendrieth overstated her clients' tax deductions without their knowledge as a means of increasing her tax return preparation fees, which were linked to the amounts of the refunds the returns claimed. Hendrieth's clients frequently learned about her services from co-workers or family members. The government's complaint alleges that Hendrieth prepared nearly 900 tax returns for the tax years 2001 through 2003, which claimed refunds in excess of $2.8 million.
Court filings indicate that Hendrieth either made up or vastly inflated claimed deductions, such as deductions for medical and dental expenses, property taxes, charitable contributions, and job related expenses. For one client, Hendrieth prepared a return that claimed deductions for charitable contributions of $34,394, even though the taxpayer provided no substantiation of that amount to Hendrieth. Many of the returns audited by the IRS have resulted in Hendrieth's clients having to pay substantial additional taxes.