Tax Preparer Fraud – Beware!

U.S. JUDGE BARS TWO CONNECTICUT RESIDENTS FROM PREPARING FEDERAL TAX RETURNS FOR OTHERS

Father and Daughter Prepared Tax Returns That Falsified and Inflated Deductions for Customers

WASHINGTON – A federal district court in Connecticut has permanently barred Wethersfield residents Deowraj Buddhu and his daughter, Sunita Buddhu, from preparing federal tax returns for others. Mr. Buddhu and/or Ms. Buddhu have operated businesses that provide tax return preparation services under the names Paradise Consulting, Phoenix Consulting and Lotus Consulting, in Hartford, and Wethersfield, Connecticut.

After conducting a hearing on February 6, 2009, the Court found that the Buddhus have prepared federal income tax returns and amended federal income tax returns containing falsified or inflated deductions for their customers resulting in understatements of their customers’ tax liabilities. Based on an IRS investigation, it was determined that the Buddhus prepared 2,090 tax returns for the tax years 2004 and 2005, and Ms. Buddhu, operating under the name Lotus Consulting, prepared 922 federal income tax returns for the tax year 2006. The Court also found that the Buddhus prepared federal income tax returns for their customers on which they listed false identification numbers for themselves. The Court found that Ms. Buddhu interfered with the administration of the internal revenue laws by falsely representing to her clients that the IRS has no authority to conduct examinations of Connecticut residents’ tax returns and by preparing letters for her clients to submit to the IRS stating this unfounded position.

Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorney Lisa Bellamy for her efforts in obtaining the injunction and Supervisory Tax Specialist Lucille Jessey of the Internal Revenue Service who managed the investigation of tax returns prepared by the Buddhus.

In the past decade, the Justice Department has obtained injunctions against more than 400 tax return preparers and tax-fraud promoters.

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