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Tuesday, November 5, 2024

Court orders Miami-area tax preparers to pay nearly $1 million for contempt

Attorneys & Judges
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Lisa O. Monaco Deputy Attorney General | Official Website

A federal court in Miami has found Gerald Vito, James Eleby, and Kwame Thomas in contempt for violating a permanent injunction that barred Vito and Eleby from preparing or assisting in the preparation of federal tax returns for others. The order was issued after it was demonstrated that they continued to prepare tax returns despite the injunction.

The initial complaint against Vito and Eleby, filed in March 2021, accused them of significantly understating their clients' tax liabilities by claiming fabricated or inflated deductions. On December 27, 2021, a default judgment permanently enjoined them from preparing tax returns for others.

In a hearing held in September, the court concluded that Vito and Eleby violated this injunction by continuing their activities. Thomas was also found to have breached the injunction by collaborating with Eleby on tax return preparations.

As a result of these violations, the court ordered Vito, Eleby, and Thomas to disgorge $988,789.56 in fees earned during the period they were non-compliant with the injunction. Additionally, Vito and Eleby must disclose to the government all taxpayers for whom they prepared returns post-injunction date and notify those taxpayers about the injunction. They are also required to vacate their business premises and file an affidavit confirming compliance with these orders.

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division announced these developments.

The IRS advises taxpayers to be cautious when selecting a tax preparer. Resources such as a free directory of federal tax preparers and tips on avoiding fraud are available on its website.

Over the past decade, numerous injunctions have been obtained against fraudulent tax preparers by the Justice Department's Tax Division. More information about these cases can be found on their website.

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