Feds warn public about income tax scam

This is a text version of a Crime Report from Clay County Florida. The article has been edited to remove text that is not pertinent to IAS/RaPower3.

The original article is here.

By: Clay County Sheriffs Office

WASHINGTON, D.C. – With tax season in full swing, the U.S. Justice Department is urging the public to avoid dishonest tax-return preparers who fleece their customers and illegally drain the U.S. Treasury.

Noting that every taxpayer is ultimately responsible for the contents of his or her own return, Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division also warned the public to be wary of anyone who guarantees a refund or who claims to sell a sure-fire way to reduce your taxes.


Some other fraudulent schemes and practices that have been stopped through injunction orders entered by federal courts throughout the country include, fabricating fake Form W-2 information, claiming bogus education and first-time homebuyer credits, claiming phony child and dependent care credits or residential energy credits, claiming fraudulent fuel tax credits, falsely exempting foreign earned income, inflating unreimbursed employee business expense deductions and fraudulently inflating or decreasing a client’s income or deductions to maximize the Earned Income Tax Credit.


In November 2015, the tax division sued to shut down an alleged tax scheme based on a purported solar energy generation facility in Utah. In the case of United States v. RaPower-3 LLC, the feds alleged the defendants purportedly sold “solar thermal lenses” to customers and told their customers that they are entitled to claim depreciation expenses and the solar energy credit for the lenses—even though the defendants allegedly knew or had reason to know that their customers were not in the business of producing and selling solar energy and that the defendants’ purported solar energy facilities did not actually produce solar energy in a manner that meets the Internal Revenue Code’s requirements for claiming the credit.

And in the same month, in United States v. James Tarpey, the tax division sued to shut down an alleged timeshare donation scheme. According to the United States’ complaint in that case, the defendants have their customers give rights in a timeshare to “Donate for a Cause,” a tax-exempt entity operated by Tarpey. The complaint alleges that the customers receive an appraisal that grossly overvalues the donated timeshare rights and use that appraisal to claim a large charitable donation deduction, even when the true market value of the timeshare right is a small fraction of the appraised value.

The Tax Division is committed to stopping those who promote fraudulent tax shelters and other schemes or who prepare false returns,” Ciraolo said. “Along with our colleagues at the IRS, we will find dishonest preparers and fraudulent tax-scheme promoters and work to shut them down. We will hold accountable those who willfully assist taxpayers to file false returns. And in appropriate cases, we will prosecute them. But everyone can help stop fraud and protect our public finances. Pay attention to your tax return and make sure that it’s right. If you think that a tax return preparer is deliberately preparing incorrect returns, or you suspect someone is selling a phony tax-loss scheme, report that person to the IRS.”