Taxation Legal News

U.S. Asks Federal Court to Bar Dallas Man from Preparing Tax Returns for Others

The United States has sued a Dallas, Texas, man, seeking to bar him from preparing federal income tax returns for others, the Justice Department announced today. According to the government’s civil injunction complaint, Farai Mushaninga, who operates FW Hawk Services and FW Hawk Taxes in Dallas, prepared federal income tax returns claiming fraudulent fuel tax credits, a scam that the complaint says is a serious enforcement problem for the Internal Revenue Service (IRS).

The government’s complaint alleges that Mushaninga fraudulently prepared a return for one customer, a cashier, claiming that she bought 19,050 gallons of gasoline for business-related purposes. The suit notes that for such a claim to be accurate, the cashier (whose total income for the year was $392) would have had to spend approximately $41,910 for gasoline that year—nearly 110 times her total income—and would have to have driven approximately 381,000 miles during the year, an average of 1,084 miles each day, seven days a week.

The government complaint alleges that Mushaninga has prepared at least 1,207 returns since 2006 and the IRS has identified over $900,000 dollars in fraudulent fuel tax credits on Mushaninga-prepared returns.

The Justice Department obtained an injunction last week against a Miami tax preparer in a case involving allegations of similar fraudulent fuel tax credits. http://www.usdoj.gov/tax/txdv07254.htm Since 2001, the Justice Department’s Tax Division has obtained more than 235 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department Web site at http://www.usdoj.gov/tax/taxpress2007.htm. More information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.

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	Did You Know?
	Corporate Reorganizations; Transfers of Assets or Stock Following a Reorganization These proposed regulations address the effect of transfers of the assets or the stock of parties to a reorganization pursuant to transactions intended to qualify as reorganizations within the meaning of section 368(a) of the Internal Revenue Code. REG-130863-04. Published August 17, 2004.