Federal Court finds Miami-Based Tax Return Preparer in Contempt and Orders Disgorgement of Ill-gotten Fees as a Sanction

On July 11, 2023, a federal court in the Southern District of Florida found Rose M. Chazulle in contempt of court for violating a permanent injunction prohibiting her from preparing or filing federal tax returns or other tax-related documents and forms for any person or entity. The court ordered that she disgorge to the United States more than $48,000 in ill-gotten fees, which the parties agreed was a reasonable approximation of the fees that she earned for tax returns prepared in violation of the injunction.

In 2016, the court permanently enjoined Ms. Chazulle from preparing tax returns for others. Despite the court’s orders prohibiting her from preparing or assisting in the preparation of tax returns for others, Ms. Chazulle stipulated that she continued her return preparation activities preparing returns using the preparer tax identification numbers assigned to her daughter and brother-in-law and using the electronic filing identification numbers associated with their businesses. Ms. Chazulle further stipulated that she received at least $48,100 in fees for preparing returns in violation of the court’s injunction. Based on Ms. Chazulle’s stipulations, the court found her in contempt for violating the permanent injunction and ordered as a civil contempt sanction that she disgorge the fees she earned in violation of the injunction.

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers as return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams. The IRS offers tips on how to accurately file returns and how to choose a tax return preparer, as well as steps taxpayers can take to get a jumpstart on filing. The IRS has launched a free directory of federal tax preparers and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. 

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $73,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

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 here.