Professional Documents
Culture Documents
The case that resulted in the 200th injunction bars Joyce M. Stone, her son Charles
J. Freed and their company, Stone and Associates, all of Hillsdale, Mich., from
preparing any income tax returns for another person or entity. It is a preliminary
injunction. According to the government’s complaint in the case, Stone and Freed
prepare customers’ income tax returns claiming improper deductions. According to
government filings and an IRS audit of returns prepared by Stone, Freed and another
defendant, and cited by the court in its opinion, the defendants understated their
customers’ tax liability by an average of nearly $6,300 per return. The court noted
that Stone, Freed and a third defendant have prepared more than 3,000 returns for
customers since the start of 2005, including 1,786 in 2006. More information about
this case and the recently obtained preliminary injunction is available at
http://www.usdoj.gov/tax/txdv06525.htm
“With each passing day, tax fraud promotions - including fraudulent return
preparation - can ensnare more customers and cost the federal Treasury and honest
taxpayers more and more in unpaid taxes and fraudulently obtained refunds,” said
Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax
Division. “It makes sense to shut down these activities as quickly as possible. In
appropriate cases, the Tax Division will also authorize prosecution of the offenders.”
During the past five years, the Tax Division has obtained injunctions barring the
promotion and use of tax fraud schemes that include falsely reporting “zero income”
on tax returns; failing to withhold, report and pay payroll and income taxes; and
using trusts to conceal ownership or control of assets. Additionally, injunctions were
obtained for falsely claiming that Native American casino gaming proceeds are tax
exempt; falsely claiming that only income from foreign sources is taxable; using a
“corporation sole” to avoid tax; and purporting to pay employees in commodities
such as milk.
The Justice Department also has obtained injunctions against numerous return
preparers who prepare false or fraudulent returns.
More information about the Tax Division’s injunction cases from 2001 to 2006 is
available on the Justice Department website at
http://www.usdoj.gov/tax/taxpress2006.htm.
###
06-528