Court Issues Order Barring Michigan Tax Preparer from Preparing Federal Tax Returns for Others

The U.S. District Court for the Eastern District of Michigan has issued an order permanently barring Nataki Davis, (formerly known as Nataki Barnes), a Southfield, Mich., tax preparer, from preparing federal tax returns for others for a period of five years, the Justice Department announced today.  The court also ordered Davis to mail copies of the court order to all persons or entities for whom she has prepared federal tax returns, amended returns or other federal tax documents or forms since Jan. 1, 2011.  Davis consented to the civil injunction order.

Davis operated a business that provided tax return preparation services under the names NKB Tax Services, NKB Tax Services, Etc. and Ready Trans.  The complaint states that Davis prepared approximately 1,597 tax returns for tax processing years 2010 through 2012.  The Internal Revenue Service (IRS) closed examinations on 52 of those 1,597 tax returns prepared by Davis and 48, or 92%, of those examined returns resulted in additional tax assessments.  Many of the returns that Davis prepared for customers contained false deductions and credits, including inflation of deductions for charitable contributions, mortgage interest, real estate and personal property taxes paid and false education credits. Returns also included manipulation of taxpayer data for the purposes of claiming the Earned Income Tax Credit for which the taxpayers would otherwise be ineligible.

The court also issued an order permanently barring Davis’s brother Clarence Barnes Jr. from applying for an electronic filing identification number (EFIN) or assisting any other individual or entity in the application for or procurement or use of an EFIN to file a federal income tax return.  Barnes consented to this civil injunction order.

The IRS lists return-preparer fraud as one of the Dirty Dozen Tax Scams for 2013. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website www.justice.gov/tax.

Related Materials:

United States v. Nataki Davis, et al.
Complaint for Permanent Injunction (PDF)
Order of Injunction with Respect to Defendant Clarence Barnes, Jr. (PDF)
Order of Injunction with Respect to Defendants Nataki Davis and NKB Tax Services, Inc. (PDF)