A federal court in Chicago has barred Neal and Royanne Reddy and their corporation, Royanne & Co. Inc., from preparing tax returns, the Justice Department announced.The court found that the Reddys, whose business offices are in Marseilles and Princeton, Ill., prepared more than 15,000 tax returns between 2002 and 2005.

According to the court, Royanne Reddy directed her firm’s employees to fabricate or inflate deductions to generate larger tax refunds for customers. Evidence introduced at the trial, based on 72 tax returns prepared by Royanne & Co. that were audited by the Internal Revenue Service, showed a 100 percent error rate. In its ruling, the court described the errors as “appalling” and “the product of design.”

According to IRS estimates, the Reddys caused tax revenue losses totaling $13 million. The Reddys must now notify their customers of the court’s findings, provide a list of their customers to the court by June 8, and post the court’s findings at their businesses and on their Web site, under a court order.

Since 2001 the Justice Department has obtained injunctions against more than 240 tax preparers and tax-fraud promoters.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access