Chicago-Area Return Preparer Barred from Preparing Federal Tax Returns

Today, a federal judge barred Irving Brown Sr., a retired Chicago Fire Department captain, from preparing federal tax returns for others, the Justice Department announced. After a two-day bench trial in February, the court found that Brown Sr. of Chicago, Illinois, prepared and filed fraudulent tax returns for his customers, including Chicago Fire Department firefighters.

The court found that Brown, Sr. operated a seasonal tax return preparation business out of his Chicago home called Irving Brown, Sr. Tax Services and prepared more than 1,600 federal tax returns from 2011 to 2015 either himself or with the assistance of others. The court’s ruling noted that the Internal Revenue Service (IRS) audited 94 returns prepared by Brown Sr. and found that all but two required an adjustment by the IRS. Based upon these audits, the total tax deficiency was more than $700,000, and the IRS projects that the tax loss is well in excess of $1 million, according to the court’s findings.

The court determined that Brown engaged in a variety of ways to underreport his customers’ tax liabilities, such as fabricating the existence of small businesses with high expenses and inflating itemized deductions in order to offset earned income on his customers’ tax returns. The court also determined that Brown Sr. routinely fabricated itemized deductions such as charitable contributions and unreimbursed employee expenses. For example, on one of his customer’s returns, Brown Sr. reported more than $3,000 in parking expenses as unreimbursed employee expenses when the customer did not drive to work or park any car at work. The court noted that this customer did not even have a car for that particular year.

In addition to underreporting his customers’ tax liabilities, the court determined that Brown actively attempted to impede and obstruct the IRS’s investigation into his preparation activities. For example, the court found that Brown offered to pay $3,000 towards a customer’s tax liability if the customer agreed not to turn Brown in or sign an affidavit implicating him. The court also determined that Brown provided customers with false receipts and blank work orders, which appeared to be written in the same handwriting, and instructed those customers to present those documents to the IRS in support of the fraudulent items reported on their returns.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division thanked the revenue agent of the IRS–Small Business/Self-Employed Division, who conducted the investigation and Trial Attorneys Jordan A. Konig and Mary A. Stallings of the Tax Division, who litigated this case.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has tips on its website for choosing a return preparer and has launched a free directory of federal tax preparers.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.