The Justice Department has filed suit against a Detroit tax preparer to keep her from preparing federal tax returns for others, accusing her of cheating her clients.
Markita R. Darden, who operated M&M Express Tax Service, is currently serving a sentence at the Federal Prison Camp in Alderson, W.Va., after she pled guilty to one count of knowingly aiding and assisting in the preparation of false and fraudulent tax returns.
The DOJ accuses Darden of preparing income tax returns for customers and then, without her customers' knowledge, filing the returns for a greater refund amount than the one reported on the customer's copy. She allegedly claimed the difference in the refund amounts as a tax preparation fee in her refund anticipation loan account and retained the money for herself.
In 2004, the IRS Fraud Detection Center found that Darden and her business had been associated with more than 100 fraudulent amended tax returns. In April 2004, an undercover IRS special agent had her prepare and file a 2003 tax return. The return contained a fraudulent welfare-to-work tax credit, but she did not discuss the fraudulent credit or additional charitable cash contributions claimed on the return with the undercover agent. The IRS said if the return had been properly prepared, the tax due would have been $215, but the fraudulent return claimed a tax refund of over $2,800.
Fraudulent claims on 55 of Darden's tax returns allegedly amounted to $164,048, including deductions for IRAs, tuition and fees, unreimbursed employee business expenses, education credits, mortgage interest credits, and work opportunity credits.
Despite being advised in 2005 that she was under investigation by the IRS's Criminal Investigation Division, she continued to prepare income tax returns and claim false deductions, according to the government's complaint. Darden was sentenced in August 2006 to a 15-month jail term and was ordered to pay restitution of over $164,000. She was also told not to prepare anyone else's return except her own while under court supervision. However, the complaint noted that she often did not sign her name to the tax returns she prepared. The injunction seeks to put a permanent stop to her tax prep career.
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