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Committing the sins of the father

December 15, 2008

Chester Muhammad, a Pennsylvania return preparer, had a very bad day in Tax Court in September 2006 when five of his clients lost cases based on imaginary charitable deductions supported by bogus documents cooked up by the preparer. The preparer died, but his practice, and practices, apparently lived on. Now the Justice Department has filed suit to shut down his survivors:

WASHINGTON – The United States has filed a lawsuit against a Coatesville, Pa., woman and two family members to bar them permanently from preparing federal income tax returns for others, the Justice Department announced today. The government’s civil injunction suit alleges that Chalamar Muhammad, her husband Curtis Muhammad and her mother Doranna Muhammad prepared federal income tax returns for customers claiming fabricated deductions and credits.

The government complaint alleges that the Muhammad’s firm, CDC Tax Preparation and Financial Services, has a history of preparing hundreds of fraudulent returns annually and obstructing Internal Revenue Service (IRS) investigations of the fraud. The suit was filed in U.S. District Court for the Eastern District of Pennsylvania in Philadelphia.

Examples of bogus tax deductions mentioned in the government’s court papers include false claims of contributions of thousands of dollars to churches and charities, and false claims of education credits. According to the complaint, Chalamar Muhammad allegedly tried to obstruct IRS audits of her customers’ returns by submitting documents that she fabricated to purportedly substantiate bogus deductions and credits.

Of course the Muhammads' clients can look forward to some extra IRS attention.

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