A Kansas City, Kan., area tax preparer have been accused of utilizing S corporations to file fraudulent tax returns. The government wants to shut down the tax business The Justice Department asked the court to permanently bar Bias and his company of preparing federal tax returns to others. It is also asking the court to order Bias to turn over the names of his customers from 2012 on.
The S Corp abuses include allegations of failing to report customers' pass-through income as taxable income on their 1040 returns; falsely lowering S Corp income and reporting that on individual returns; double-deducting personal expenses; and preparing and filing returns for fictitious businesses. The government said the returns short-changed on taxes by at least $828,506.
Bias and ISTC are also accused of fabricating itemized deductions on personal tax returns and of fabricating income and expenses for customers who were falsely reported to be operating sole proprietorship.