Federal Court Permanently Shuts Down Ohio Tax Preparer

Note: View order here.

A federal court in Ohio yesterday permanently enjoined a Columbus, Ohio, tax preparer from preparing returns for others and from owning or operating any tax return preparation business in the future. According to the court’s order, Michael Craig, both individually and doing business as Craig’s Tax Service, consented to the entry of the injunction.

The court’s order requires Craig to send notice of the injunction to each person for whom he prepared federal tax returns or refund claims after Jan. 1, 2022. According to the government’s complaint, many tax returns that Craig prepared made false and fraudulent claims, including:

• Reporting losses for fictitious Schedule C businesses;
• Claiming costs of goods sold (COGS) for types of businesses that cannot legitimately claim COGS and without supporting documentation;
• Inventing or inflating expenses for otherwise legitimate Schedule C businesses; and
• Taking deductions for both cash and non-cash charitable deductions that are either exaggerated or completely fabricated.

According to the complaint, the IRS estimated a tax loss of more than $3.1 million in 2022 alone from tax returns prepared by Craig.

The Justice Department’s Tax Division made the announcement.

Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS also offers guidance on the credentials and qualifications that taxpayers should seek from their return preparer.

In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.