Justice Department Sues to Permanently Bar Alleged Fraudulent S. Florida Tax Return Operation

South Florida Tax Preparers Allegedly Fabricate Deductions and Credits to Reduce Their Customers’ Tax Liabilities and Secure Fraudulent Refunds
WASHINGTON - The Justice Department filed suit today asking the U.S. District Court for the Southern District of Florida to permanently bar Abelardo Ernest Cruz, Ruth Real, and their companies, Nations Business Center Inc., Nations Tax Service Inc., and Ruth Real & Associates Inc., from preparing federal tax returns.

According to the complaint, Cruz and Real whose operations are in Miami and Coral Springs, Fla., prepared tax returns for customers that claim fabricated deductions and credits. An examination by the Internal Revenue Service (IRS) of tax returns prepared by Cruz and Real for tax years 2003 and 2004 revealed a pattern of false claims, including fabricated depreciation deductions, unsubstantiated casualty losses, and overstated employee business expenses.

The government alleges that the defendants furthered their fraudulent scheme by having Real purport to represent their customers during the IRS audit process, even though she was not authorized to do so. The United States further alleges that she engaged in a pattern of behavior and tactics designed to obstruct and delay the audit process. The government estimates in the complaint that the alleged fraudulent tax preparation scheme by the defendants has resulted in an understatement of their customers’ federal income tax liabilities of more than $55 million for returns that they prepared in 2003 and 2004 alone.

This civil injunction case is part of the Justice Department’s nationwide crackdown on tax scams, including the preparation of fraudulent federal tax returns. Since 2001, the Justice Department has obtained more than 240 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. More information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.