DOJ Sues Fraudulent Tax Preparation Firms
Legal News Center
The Justice Department has brought suit in U.S. District Court in Chicago against a Seneca, Ill., couple, Royanne and Neal Reddy, and their businesses, Royanne’s Tax Services and Royanne & Company, seeking to bar them permanently from preparing federal tax returns for others. According to the government complaint, the Reddys, operating their businesses in Marseilles and Princeton, Ill., have prepared more than 9,000 returns since 2002.
The complaint states that the IRS examined 70 income tax returns prepared by the Reddys or employees under their direct supervision. It’s further alleged that all of these returns required adjustments, and 64 returns contained improper deductions of as much as $30,000. The complaint alleges that average under-reported tax on these 70 returns was $2,775, and states that the IRS estimates the total cost to the Treasury of the Reddys’ and their employees’ improper income tax return preparation to be more than $13 million.
The government’s suit alleges that the Reddys fraudulently fabricate or inflate business expenses for customers to reduce their reported income. The Reddys also allegedly fabricate income for some customers to get them Earned Income Tax Credits to which they are not entitled. It is further alleged that the Reddys have provided fabricated documents to IRS agents auditing their customers’ returns.
The suit asks the court to order the Reddys to give the government a list with their customers’ names, addresses, e-mail addresses, phone numbers and Social Security numbers.
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