U.S. v. Chappell, 2010 U.S. Dist. Lexis 16474 (M.D. AL. 2010)
Government indicted tax preparer who had previously received a 15 year ban.
Approximately 242 fraudulent tax returns had been filed leading to erroneous refunds of over $800,000. The court noted that a lifetime ban is generally limited to instances where the preparers conduct qualified as extreme or egregious misconduct. Citing, U.S. v. Gleason, 432 F.3d 678, 683 (6th Cir. 2005), U.S. v. Wordbrock, 38 F.3d 440, 447 (9th Cir. 1994) and U.S. v. Bailey, 789 F. Supp. 788, 818 (N.D. Tex. 1992).
Taxpayer defaulted. The Court granted the default. However, the court stated "a lifetime ban is a draconian remedy and should not be undertaken lightly." The Court entered an injunction for a period of 15 years.
Mr. Chappell was then charged with 21 counts of assisting in the preparation of false tax returns under 7206. Mr. Chappell was released on bond. Mr. Chappell sought review because the special conditions of the bond prohibited Mr. Chappell from continuing to prepare and file tax returns.
The Court framed the issue as whether the bond reasonably assured the safety of the public. The Court found that the issue is broader than the risk of physical violence.
The Court found that Mr. Chappell could be properly barred from preparing tax returns but, could not be barred from all tax related services such as audit representation since there was no evidence that Mr. Chappell had violated any law in that area.
- Tax Fraud Report
- The Latest Criminal Tax Decisions, Selected Civil Tax Opinions and Related Economic Crimes.
