The U.S. District Court for the District of Connecticut issued a permanent injunction today against Juan Carlos Frias, a Connecticut tax return preparer, and his businesses: USA Tax LLC, Multi Latin Services LLC, and Connecticut Tax and Services Inc. The court order permanently bars them from preparing federal tax returns for others.
According to the Justice Department’s complaint, from 2017 through 2021, Frias and his companies prepared over 10,000 tax returns for customers. The complaint alleges that during those years, Frias and his companies consistently filed tax returns that understated customers’ liabilities and inflated their refunds by falsifying business expenses, reporting false filing statuses and qualifying children or dependents, claiming false education and residential energy credits, and fabricating erroneous itemized deductions such as medical and dental expenses, charitable deductions, and impairment-related work expenses.
The IRS states that anyone paid to prepare or assist in preparing federal tax returns is legally required to have a valid Personal Tax Identification Number (PTIN) and must sign the return with their PTIN. Not signing the return, commonly known as “ghost preparation,” is often a red flag indicating an attempt to avoid detection by the IRS. The United States alleges that Frias acted as a ghost preparer.
According to the court’s order, Frias and his businesses consented to the entry of the injunction. This permits the United States to conduct post-judgment discovery to monitor compliance with the injunction. The order requires them to (1) send notice of the injunction to each person for whom they prepared federal tax returns between January 1, 2018, to the present; (2) post a paper copy of the injunction at all physical business locations; and (3) post an electronic copy of the injunction on any business website or social media profile they maintain or create over the next five years.
Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Taxpayers are advised to remain vigilant against unscrupulous tax preparers. The IRS provides information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS warns taxpayers to avoid ghost preparers and lists other improper acts that some tax preparers engage in.
In recent years, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns can be found on this page. If you believe that one of these enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.