March 21, 2012 10:51:25 AM
The United States Justice Department is seeking to shut down a tax preparer who runs a business in Columbus.
On Tuesday, federal prosecutors said they filed a federal civil injunction suit to bar Cynthia H. Carter from preparing federal tax returns for others.
Prosecutors say Cynthia's Tax Service prepares returns for customers who report false income and expense amounts and falsely claim several tax credits, including the first-time-homebuyer credit.
Congress enacted the first-time-homebuyer credit in 2008 in an effort to reinvigorate the slumping real estate market. Persons who had not owned a home in the previous three years could claim a credit of up to $8,000 against their federal income taxes if they bought a home after April 8, 2008. Congress later expanded the program to allow current homeowners to claim the credit for a purchase of a new home, under certain conditions. The credit has since expired.
The Justice Department charges that Carter claimed first-time-homebuyer credit on her customers' returns even though the customers had not bought new homes in those tax years and were ineligible for the credit.
According to prosecutors, the Internal Revenue Service estimates that Carter's tax return preparation could have resulted in over $4.25 million in lost revenue to the United States.
When reached for comment Wednesday morning, Carter stated she does not plan on filing any taxes for clients this season. Instead she said she is focusing on completing her degree in business administration.
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