Federal Court Permanently Bars Michigan Women and Her Businesses Based on Fraudulent Conduct and Orders them to Disgorge Nearly $690,000

A federal court in Detroit, has permanently barred Annetta Powell and her seven tax preparation-related businesses, Alliance Tax Services Inc., Nationwide Tax Services Inc., Tax Expert Stores Inc., United Tax Services Inc., Top Financial Specialists Inc., United Financial Team Corporation and Speedy Tax Stores Corporation, from preparing federal tax returns for others and from owning or operating a tax return preparation business. The court also ordered the defendants to disgorge $689,797.91 to the United States, representing the ill-gotten gains that the defendants received for preparing certain categories of fraudulently prepared returns from 2019 through 2021.

The order and the judgment of permanent injunction follow a twelve-day trial held from November 2023 to January 2024. The order, signed by U.S. District Judge Mark A. Goldsmith for the Eastern District of Michigan, notes that the “Defendants’ preparation of fraudulent returns was widespread” and that “all of Powell’s stores and many preparers routinely violated IRS rules and regulations.” According to the court’s order, Powell, through her several companies, operated up to five tax preparation stores in Detroit, Pontiac, and Flint, first under the name “The Tax Experts” and then, since 2021, under the name “Speedy Tax Stores.” The court found that the “harm caused by Defendants’ fraudulent tax preparation scheme was severe and widespread, occurring across five stores for nearly a decade.” The court concluded that the Defendants “prepared too many fraudulent tax returns with similar issues … for the pattern to have been random.”

In reaching its conclusion, the court noted that Powell refused to cooperate with the IRS investigation and took active steps to “thwart [the investigation] by altering customers’ files and returns and manipulating the use of an Electronic Filing Identification Number (EFIN), which is a number assigned to a taxpayer that the IRS uses to monitor the returns preparers submit. Powell could not obtain an EFIN because of her criminal record so her stores used EFIN numbers under someone else’s name. This misconduct, along with other past fraudulent conduct, led the court to determine that Powell “would likely find new ways to prepare fraudulent returns” if she were not permanently barred from doing so.

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

IRS investigated the case.

Trial Attorneys Bradley Sarnell, Elizabeth Kirby, Daniel Applegate, Thelma Lizama, Eric Ashby II and Steven Shashy of the Justice Department’s Tax Division prosecuted the case.

Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS also offers guidance on the credentials and qualifications that taxpayers should seek from their return preparer.

In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.