The U.S. Justice Department has filed a lawsuit in federal court against a Stone Mountain tax preparer, alleging she and her Liberty Tax Service franchises understated clients’ tax liabilities and overstated federal refunds over a four-year period.
The action, filed Monday in U.S. District Court in Atlanta against Joan Leger and the 1804 Tax Group, which does business as Liberty Tax Service, seeks to recover at least $2 million in lost federal taxes and a permanent injunction that bans Leger and her companies from providing tax preparation services.
Efforts were being made to reach Leger and her company for comment. Efforts were also being made to reach JTH Holding Inc., the parent company of Liberty Tax Service, which describes itself as “the fastest-growing tax preparation franchise.”
The suit, at the behest of the Internal Revenue Service, said Leger has been preparing tax returns since around 1996. From 2009 to 2013 she allegedly used electronic filing identification numbers, or EFINs, that belonged to relatives to file returns, in violation of federal law
She and her franchises are accused of adjusting clients’ credits and deductions to maximizing refunds and creating or inflating deductions, wages, income, expenses or credits to maximize earned income tax credits. She also allegedly exaggerated business expenses of clients to maximize refunds.
Leger and her franchises allegedly processed nearly 6,000 returns from 2009 to 2013, with clients receiving nearly 5,600 refunds.
The suit said Leger’s clients possibly face thousands of dollars in interest and penalties due to the allegedly fraudulent returns.
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