U.S. Seeks to Permanently Bar Orlando, Fla., Tax Return Operation
Fabricated Deductions & Credits to Fraudulently Reduce Clients’ Tax Liabilities Result in Estimated $20 Million Loss to U.S.
WASHINGTON -- The United States today filed suit in U.S. District Court for the Middle District of Florida to permanently bar Humberto N. Collazo, Maritza Collazo, Humberto Collazo III, Adrian Collazo, Collazo Accounting Group Inc. and Master Tax Service Inc. from preparing federal tax returns, the Justice Department announced. According to the government’s complaint, the defendants prepared tax returns that included false information so as to reduce their clients’ tax liabilities.
The government alleges that the defendants’ scheme involved knowingly ignoring or modifying information provided by their clients for the purpose of claiming false or overstated deductions and for claiming tax credits that their clients were not eligible to claim. In addition, the complaint alleges that defendants improperly deducted non-deductible expenses, claimed non-qualifying individuals as dependants, and misrepresented the filing statuses of their taxpayer-clients so as to reduce their tax liabilities. Defendants, according to the complaint, are also alleged to have failed to accurately disclose their name and Social Security number on returns that they have prepared as required by law.
The government estimates in the complaint that the alleged fraudulent tax preparation scheme resulted in an understatement of their customers’ federal income tax liabilities of more than $17.8 million for the more than 15,000 returns that they prepared from 2002 to 2005 alone. Additionally, the government estimates that at least $2.8 million in interest is owed on these deficiencies, which brings the total tax loss to more than $20 million.
The complaint also seeks an order requiring defendants to provide the Justice Department with the names, Social Security or taxpayer identification numbers, addresses, e-mail addresses and telephone numbers of their customers.
“This civil injunction suit is part of the Justice Department’s nationwide crackdown on tax scams, including the preparation of fraudulent federal tax returns,” said Nathan J. Hochman, Assistant Attorney General of the Justice Department’s Tax Division. “Since 2001, the Justice Department has obtained more than 345 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns.”
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