Justice Department Files Lawsuit to Stop Tennessee Man from Preparing Tax Returns

The Department of Justice filed a civil lawsuit today in Memphis federal court to stop Grady Smith, who does business as One Price Refunds, from preparing federal tax returns.  According to the complaint, Smith and One Price Refunds have prepared over 2,000 tax returns since 2009.

The complaint filed with the U.S. District Court for the Western District of Tennessee alleges that Smith understates his customers’ federal tax liabilities by reporting false or inflated business expenses, reporting false or inflated educational expenses and improperly claiming the earned income tax credit.  In addition, the complaint alleges that Smith has prepared tax returns using fictitious taxpayer identification numbers, thereby obscuring his identity as the tax return preparer.   According to the complaint, Smith’s activities may have caused a total of over $800,000 in harm to the government.

Return preparer fraud is one of the Internal Revenue Service’s Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013 .  The Internal Revenue Service has some tips for choosing a tax preparer: www.irs.gov/Tax-Professionals/Choosing-a-Tax-Professional .  In the past decade, the department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website at www.justice.gov/tax/taxpress2013.htm .

Related Materials:

United States v. Grady Smith
Complaint for Preliminary and Permanent Injunction