Justice Department Sues to Shut Down Chicago-Area Return Preparer

The Justice Department filed a complaint today seeking to bar a Chicago-area tax return preparer from owning or operating a tax return preparation business and preparing tax returns for others.

The civil complaint against Sir-Michael Davenport and his Illinois-based business, My Unity Financial & Tax Preparation LLC, was filed in the U.S. District Court for the Northern District of Illinois.

The complaint alleges that Davenport knowingly took unreasonable or incorrect positions on returns he prepared that resulted in understatements of the tax his customers owed and overstatements of the refunds to which they were entitled to receive. In particular, the complaint alleges that Davenport prepared returns that claimed deductions for purported business losses on Form 1040 Schedule C that he knew were false. The complaint also alleges that Davenport conceals his identity from the IRS by operating as a “ghost preparer,” meaning he does not sign his clients’ tax returns, nor does he identify himself as the paid preparer by reporting his Preparer Tax Identification Number – or PTIN – on the returns he prepares for paying clients despite being legally required to do so. Not signing a return, or “ghost preparation,” is often a red flag that a preparer is attempting to avoid detection by the IRS.

The government further alleges that Davenport began preparing tax returns as early as 2018 and filed hundreds of tax returns in 2021 and 2022, with anywhere from 69% to 81% of the returns he prepared in those years reporting average business losses of between $26,507 to $31,879. By repeatedly understating his customers’ tax liabilities, the complaint alleges that the United States has been harmed by Davenport’s conduct resulting in the significant loss in tax revenue of an estimated $715,407 for tax year 2021 alone.

Deputy Assistant 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. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS warns taxpayers to avoid "ghost preparers" and lists other improper acts that tax preparers engage in to take advantage of their unsuspecting customers. The IRS also offers guidance on the credentials and qualifications that taxpayers should seek from their return preparer.

In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department 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.