Customers also face penalties as feds target tax preparers

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by Diana Zoga / News 4

KMOV.com

Posted on October 24, 2012 at 8:49 PM

Updated Wednesday, Oct 24 at 9:41 PM

(KMOV.com) -- Five former Mo' Money Tax employees have been indicted in federal court over an alleged scheme to abuse tax credits in order to give customers bigger refunds.

Jimi Clark, the owner of the Mo' Money Taxes location on Aubert Avenue in St. Louis (the company later changed its name to MoneyCo USA) is charged. So are four employees: Justin Buford, Leslie Chaney, Ray Reed, and Mary Taylor. The five are accused of listing phony expenses in order to claim American Opportunity Credits on at least 47 returns in the 2010 filing season. The customers weren't entitled to those credits and the feds say the suspects conspired to inflate customer tax returns in order to attract customers.

The estimated loss to taxpayers is more than $50,000 with each customer getting between $820 and $2441 back in returns that they weren't entitled to.

"My guess is, for every one you see here, there are probably scores more ," said attorney Al Watkins - who does not represent any of the customers listed in the indictment.

He said customers, in this situation, also face penalties and fees with the IRS.

"Voluntarily addressing it with the IRS is far, far more desirable than having the IRS come to you. Even if you don't have the money to take care of it, it's far better to report it to the IRS than to simply bury your head in the sand and wait for them to come to you," explained Watkins.

He adds that the IRS would likely work with the customer to set up a payment plan that the customer could afford to pay back, "I've seen them and witnessed them work very diligently and very cooperatively with victims of crimes of this nature."

Danielle Smith knows this first hand. She's now on a strict payment plan with the IRS, chipping away at an $1,100 tax bill that stemmed from a return, prepared at the Mo Money office on Aubert. Her 2009 return was prepared by Mary Taylor, one of the preparers facing criminal charges.

Smith says the tax preparer didn't report her entire income on her 2009 return. In March of this year, Smith received a letter from the IRS.

"I'm probably not the only person going through the same thing with them. I know I'm not," said Smith.

As for Mo' Money, she says, "They should have known eventually it was going to come back to them."

News 4 attempted to reach Jimi Clark on his mobile phone, but have not yet heard back.

The criminal charges, filed this week, are separate from civil lawsuits filed by Missouri and Illinois Attorneys General over consumer complaints. We reported that the offices of both Chris Koster and Lisa Madigan are investigating complaints over alleged bad practices at various Mo Money (Money Co) franchises in both states.

 

 

 

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