Liberty Tax Preparer Convicted of Fraud
A tax preparer working in a Detroit Liberty Tax store has been convicted of filing forty fraudulent tax returns on behalf of her clients.
The District Court found that Marquitta Nicole Jackson claimed the Earned Income Tax Credit for her clients when they did not qualify. The average sum of fraud per return amounted to $3,875.
One of the more common dynamics in retail tax fraud occurs when refund anticipation loans mix with the EITC. Franchises often shared in the proceeds from a refund anticipation loan. The EITC is a refundable credit. For many borrowers, claiming the EITC would be the difference between a return with no refund and one for almost $4,000.
In the future, it seems likely that this kind of fraud will occur less frequently. The IRS is doing more to monitor professional preparers. More importantly, there are going to be fewer loans. For at least the time being, banks cannot offer a refund anticipation loan.
Liberty’s web site does say that its stores will have loans in a few states.
Jackson will be sentenced on January 15th. There is some irony in that choice, given that the 2013 tax prep season will start then.
Note: Jackson was convicted on Sept. 19th. I missed this report. If you already knew about this story, I apologize for giving you old news.
Rachel Wishon
October 31, 2012
“The EITC is a refundable credit. For many borrowers, claiming the EITC would be the difference between a return with no refund and one for almost $4,000.” So move the EITC off the Federal return and make it a locally-administered program …
“In the future, it seems likely that this kind of fraud will occur less frequently.” … One can only hope!
“The IRS is doing more to monitor professional preparers.” The IRS is compiling a database; policing it will be an entirely different matter.
“More importantly, there are going to be fewer loans. For at least the time being, banks cannot offer a refund anticipation loan.” ‘For the time being’ says it all. As long as taxpayer demand is strong the players in the “tax settlement solutions” market will find a way to fill the need and make a profit doing so.
Captain Obvious
November 1, 2012
> “The EITC is a refundable credit. For many borrowers, claiming the EITC would be the difference between a return with no refund and one for almost $4,000.” So move the EITC off the Federal return and make it a locally-administered program …<
Not so simple my friend. That would require an act of Congress. Yes, the same folks who can't even agree on what shade of beige to paint the halls of their offices!