Dallas-based tax preparer Preston Tax Services, Inc. sued by U.S. Department of Justice

The firm allegedly promoted phony businesses, strippers.

DALLAS — The United States Department of Justice announced today that it has sued a Dallas tax preparer, Tina Preston, her tax-preparation firm - Preston Tax Services, Inc. - and several other individuals associated with the firm, seeking to bar them all permanently from the tax-preparation business. The civil injunction suit was filed in Dallas with the U.S. District Court for the Northern District of Texas.

Photo not provided by the US Dept. of Justice

Does not the Bible say to love the tax collector and the prostitute?

According to the government complaint, Preston Tax Services prepares federal income tax returns for thousands of individual customers. The complaint alleges that Tina Preston taught employees how to list phony businesses on customers' returns in order to report false business losses to offset the customers' wage income and reduce or eliminate customers' reported income.

In other instances, the complaint alleges that the defendants used phony businesses to increase customers' income in order to claim improper earned income tax credits, a benefit that is available under some circumstances to working people in certain income ranges. According to the complaint, the tax loss from the defendants' misconduct could be as much as $60 million.

The complaint alleges that Preston held what she called "commission parties" to reward employees and customers at the end of each tax-filing season. Some parties allegedly featured performances by male and female strippers and drawings for valuable prizes, including a car, $1,000 in cash and a trip to Jamaica.

"Tax-preparer fraud is a serious problem," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department's Tax Division. "The IRS and Justice Department are committed to putting fraudulent preparers out of business. Taxpayers should choose their preparer carefully and review their returns before signing to ensure that it is correct."

Since 2001 the Justice Department has obtained injunctions against more than 370 tax preparers and tax-fraud promoters.

Source: U.S. Department of Justice