TAMPA, FLORIDA – A federal court has barred a Tampa, Florida, man from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction order, to which Octavio Cruz consented, was signed by U.S. District Judge Elizabeth A. Kovachevich of the Middle District of Florida. The order also bars the business Cruz was operating, Advantage Accounting Corp., from continuing to prepare tax returns.
In August 2014, the United States filed a complaint to enjoin Cruz and Advantage Accounting Corp. from preparing returns for others. According to the complaint, Cruz prepared returns that unlawfully understated income tax liabilities and overstated refunds by fabricating or exaggerating deductions and tax credits his customers were not eligible to take. Cruz’s practices included fabricating Schedule C (Profit or Loss From Business) losses for non-existent businesses and falsely claiming child care and residential energy credits for which the customers were not eligible and did not incur. The suit alleges that Cruz also prepared returns that falsely claimed American Opportunity Credits for taxpayers who did not incur qualified education expenses or go to college. Altogether, the government alleged that loss to the U.S. Treasury from Cruz’s activities may be in the millions of dollars.
The injunction requires Cruz to provide the government with a list of all customers for whom he has prepared federal tax returns or claims for refund since Jan. 1, 2012.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details