The Justice Department is suing a tax preparation firm over “tens of millions of dollars” in tax fraud involving the Earned Income Tax Credit, a program with a significant history of bogus payments.
Eight lawsuits have been filed in Florida by the federal government, seeking to close 192 “Loan Buy Sell Tax Services” stores located throughout the Sunshine State.
According to a statement released by the Department of Justice, the firms targeted low-income customers and directed tax preparers to falsely increase the Earned Income Tax Credit, a program aimed at low- and moderate-income filers.
The firm’s employees stalked customers at bus stops and flea markets. In one case, a tax firm employee flashed a badge and impersonated a police officer in order to get someone to file a tax return with the company.
“That preparer allegedly prepared the customer’s tax return, on which the preparer falsely claimed that the customer had more than $10,000 in income in order to claim an Earned Income Tax Credit and bogus refund,” Justice Department officials said.
According to Justice, the company also made false claims on behalf of customers concerning filing status and business expenses and often charged exorbitant fees.
A Treasury Department report last year found that bogus Earned Income Tax Credit claims cost the government $10 billion a year.
