Tax Fraud Blotter: Not So Smart

Orlando, Fla.: A federal court has permanently barred preparer Demetrius Scott
from preparing tax returns for others and owning or operating a tax preparation
business. The court also entered a $1 million judgment against Scott on the federal
claim for disgorgement of the proceeds that he received.

Scott was allegedly a former franchisee of LBS Tax Services and operated a tax
preparation company called Neighborhood Tax Pros and Tax Giant with locations in
Florida, Georgia and the Carolinas. In September 2014, the U.S. filed a civil
injunction complaint against Scott, alleging that he and his employees prepared
fraudulent returns.
The complaint alleged that preparers in Scotts business targeted primarily lowincome customers with deceptive and misleading advertisements; prepared and
filed fraudulent returns to fraudulently increase clients refunds; and profited
through unconscionable, exorbitant and often undisclosed fees.
According to the complaint, Scott and his employees prepared federal returns on
which they falsely claimed the EITC and bogus education credits, reported improper
filing statuses and claimed income and expenses related to non-existent
businesses, and fabricated job-related expenses.