Federal Court Permanently Shuts Down Texas Tax Return Preparers

A federal court permanently enjoined Smart Ajayi, d/b/a Harplett Marketing LLC., Topps Tax Services and Smart Tax Services, and JoAnn Villarreal, both of Grand Prairie, Texas, from owning or operating a tax return preparation business and preparing tax returns for others, the Justice Department announced today. Ajayi and Villarreal consented to the relief.

The complaint against Ajayi and Villarreal, which was filed in the U.S. District Court for the Northern District of Texas, alleges that Ajayi and Villarreal repeatedly understated their customers’ tax liabilities by fabricating noncash charitable deductions and creating false Schedules C with inflated or fraudulent business losses, to generate tax refunds. For example, the government alleges that Ajayi prepared a return on which he falsely reported that a customer with adjusted gross income of $34,027 made $19,759 in noncash charitable contributions. The complaint alleges that, over the course of years 2016 through 2018, Ajayi and Villarreal each filed hundreds of returns, and that by repeatedly understating their customers’ tax liabilities, Ajayi and Villarreal have caused the United States to lose substantial tax revenue.

“Particularly during this time of year, when honest taxpayers are filing their returns, we want the public to know that the Justice Department will pursue those who would abuse our nation’s tax laws,” said Principal Deputy Assistant Attorney General for the Tax Division Richard Zuckerman. 

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website for choosing a tax 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 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.

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Author: March 23, 2020

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