Georgia Department of Revenue agents hauled away tax returns from Ruth Barr’s B & B Accounting and Tax Services in May, following an AJC/Channel 2 investigation into her tax preparers business. Now, the state says Georgia could be due more than $6 million from taxpayers whose returns were inflated. JOHN SPINK / JSPINK@AJC.COM

Fraud probe could recover $6.4 million in tax money, Ga. officials say

Thousands of suspicious returns tied to Hapeville tax preparer

It’s the largest case of its kind in state history.

“Those taxes are rightfully owed to the state,” said Georgia Department of Revenue Commissioner Lynne Riley, “So anyone who isn’t paying their fair share is compromising everybody else.”

Taxpayer after taxpayer told the AJC and Channel 2 they thought they could trust Hapeville City Councilwoman Ruth Barr.

After all, she didn’t just run a Hapeville tax business, she was also an elected official.

But earlier this year, the AJC and Channel 2 revealed a trail of unhappy customers stuck with IRS audits and bogus tax returns. Many of her clients were firefighters, police officers and other public safety officers who heard about Barr through word of mouth.

“Obviously they’re upset, they feel like they were duped,” said Department of Revenue Chief Investigator Josh Waites, “It doesn’t matter who’s doing your taxes, you need to look.”

Georgia Department of Revenue investigators immediately opened a criminal investigation, raiding Barr’s tax business, and alleging she inflated the value of her clients’ refunds.

Now the state is sending Barr’s clients letters asking for that money back, plus they have to pay what they would have owed had their taxes been done properly.

“It’s disappointing when any taxpayer is compromised,” said Riley, “And if there is information on a return that a taxpayer can substantiate, then we’re providing them that opportunity to do so.”

The first 100 letters were sent to the taxpayers who appear to owe the state the most money, adding up to about $872,000.

Investigators say in all there are nearly 8,000 suspicious tax returns filed through Barr’s office during tax years 2013, 2014 and 2015, for an estimated $6.4 million.

“It’s a big case for us considering that’s one preparer in South Fulton County,” said Waites, “It just kind of shows you the kind of damage one preparer can do.”

If there are discrepancies in the return, the taxpayer is responsible.

“It’s important that taxpayers know what is on a return that they sign,” added Riley, “They’re responsible ultimately for the accuracy and the validity of that information.”

Ruth Barr is already facing one criminal charge for an alleged investment scheme involving a family member in Gwinnett County, and a civil fraud judgment for another scheme involving a former client in Fulton County.

State investigators say that is just the beginning of her legal trouble.

“We anticipate several felonies indicted in Fulton County in the next couple of months,” said Waites.

Hapeville City Councilwoman Ruth Barr has denied wrongdoing and resisted calls to resign from the council. Ben Gray / AJC
Photo: Ben Gray/WSB-TV

Barr has repeatedly denied any wrongdoing, even as former clients came forward with stories about how she didn’t pay them money they were owed. Reached by phone Tuesday, Barr’s attorney said his client’s position has not changed.

“They came and took all of her paperwork and computers eight months ago and have yet to arrest or indict her on any formal charges,” said Steve Adkins. “Basically, they’re keeping her from being able to operate her business or being able to work on defending herself.”

She has also rebuffed her fellow Hapeville council members’ efforts to get her to resign.

Georgia’s Department of Revenue has already blocked Barr and any of her employees from submitting tax returns next year.

The AJC/Channel 2 investigation also revealed that Georgia does not require any training or have any oversight of the state’s tax preparers, making it even more important to check out the credentials of the person you’re hiring.

“It’s vital that taxpayers know who they’re working with,” said Riley, “They need to be sure that whoever it is they’re entrusting with their financial and identity information, they need to know they can have full confidence in the integrity of that individual.”

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