February 8, 2016

According to a civil lawsuit filed by the Justice Department, three South Carolina Liberty Tax Service franchises deliberately prepared false federal income tax returns in order to increase their customers’ refunds. The complaint alleges that the franchisee for the three locations, Christopher Paul Haynes of Irmo, South Carolina, and his employees included a bogus “arts and crafts” business on one customer’s tax return and a bogus “hair care” businesses on another’s. The lawsuit states that Haynes’s Liberty Tax Service offices have prepared more than 9,700 federal income tax returns since 2010. Based on adjustments the IRS has made to tax returns prepared and filed by Haynes’s Liberty Tax Service offices for 2010 to 2013, the average tax deficiency for tax returns audited in connection with the IRS’s investigation of Haynes is $3,834 per tax return, according to the suit. DOJ

Tagged in: Tax Fraud,