The Justice Department has asked a federal court to bar a flea market-based tax preparer from readying returns for clients.According to a complaint filed in Miami’s U.S. District Court, Tashanna McFarland of Miramar, Fla., regularly prepared federal tax returns claiming fraudulent fuel tax credits, a scam that the Internal Revenue Service has said is a serious enforcement problem. McFarland operates her tax preparation business out of a booth in a Miami flea market.
The government complaint alleges that McFarland has prepared at least 970 returns since 2003 and that the IRS has identified over $1.5 million dollars in fraudulent fuel tax credits on McFarland-prepared returns.
The federal government imposes a fuel tax on gasoline and diesel fuel that is included in the purchase price at the pump. Businesses can claim a fuel tax credit in certain rare circumstances, but most businesses and consumers who use cars or trucks on roads and highways are not eligible for the credit.
The complaint said that on a return for one customer -- a babysitter whose total income for the year was $9,316 -- McFarland claimed that the client purchased 16,451 gallons of gasoline for business-related purposes. The suit notes that for such a claim to be accurate, the babysitter would have had to spend approximately $36,192 for gasoline that year, nearly four times her total income, and would had to have driven an average of 676 miles each day, seven days a week.
Since 2001, the Justice Department’s Tax Division has obtained more than 215 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns.
