In one example given by the Justice Department, Hollaway allegedly claimed three dependents on one client's tax return: two grandchildren and a brother. But the complaint says the preparer knew that the listed individuals were not the customer's grandchildren and that the customer had paid for Social Security numbers to make the claim. It also alleges that the "brother" was the customer's fiancé, who could not be claimed as a dependent.
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U.S. Seeks to Shut Down N.J. Preparer
The Department of Justice has sued a Newark, N.J.-based tax preparer who it alleges falsified reported income and listed fake dependents so his customers could claim the maximum earned income tax credit. The agency seeks to bar Luvander Hollaway from preparer federal tax returns for others.
Hollaway is accused of failing to comply with due-diligence requirements imposed on tax preparers who claim the credit for clients. The complaint said the Internal Revenue Service assessed penalties against Hollaway in 2006 for a similar failure to comply with due-diligence requirements and a follow-up investigation revealed continuing failures and fraudulent claims.
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