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Federal Court Permanently Shuts Down Connecticut Tax Preparer

The U.S. District Court for the District of Connecticut issued a permanent injunction on May 21, 2024, against a Connecticut tax return preparer, Juan Carlos Frias, and his businesses, USA Tax LLC, Multi Latin Services LLC and Connecticut Tax and Services Inc., permanently barring them from preparing federal tax returns for others.

According to 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 displayed a pattern of filing 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, including medical and dental expenses, charitable deductions and impairment-related work expenses.

According to the IRS, anyone who is paid to prepare or assists in preparing federal tax returns is legally required to have a valid Personal Tax Identification Number (PTIN) and paid preparers must sign and include their PTIN on the return. Not signing the return, commonly known as “ghost preparation” is often a red flag that a preparer is attempting to avoid detection by the IRS. The United States alleges that Frias acted as a ghost preparer.

The court’s order requires that the IRS send notice of the injunction to each person for whom Frias and his companies prepared federal tax returns, amended tax returns or claims for refund between Jan. 1, 2018, to the present.

If returns were filed that generated in appropriate refunds taxpayers should be prepared to file amended returns, receive letters adjusting their returns from IRS, and in some cases, they will receive letters saying they are under audit.

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