Brooklyn tax preparer permanently shut down by Federal Court over fraud allegations
In a decisive legal move to curb tax fraud, a federal court in the Eastern District of New York has permanently banned a tax return preparer and her Brooklyn-based business from preparing federal tax returns for others and from owning, operating, or engaging in any tax return preparation business.
The preparer, Melida Portorreal, and her company, International Travel Multi & Tax Corp., were implicated in a civil complaint, alleging that they prepared and submitted fraudulent federal income tax returns for their clients. The fraudulent activities encompassed a range of schemes, including misrepresentation of filing statuses, fabrication of itemized deductions, false reporting of business expenses, and claiming non-deductible expenses to gain unwarranted access to tax credits.
The complaint put forth by the IRS estimated that the fraudulent returns filed by Portorreal for the tax years 2018, 2019, and 2020 resulted in losses to the United States exceeding $1 million each year.
In the court’s order, it was indicated that Portorreal and her company consented to the injunction. The terms of the order allow the United States to conduct post-judgment discovery to ensure compliance with the injunction. They also mandate Portorreal and her company to notify each individual for whom they prepared federal tax returns, amended tax returns, or claims for refund from Feb. 25, 2021 through May 31, 2022, and to post an electronic copy of the injunction on any business social media profiles for the next five years.
The announcement was made by Deputy Assistant Attorney General David Hubbert of the Justice Department’s Tax Division.
Taxpayers are urged to remain vigilant when selecting tax return preparers. To assist taxpayers, the IRS provides resources on its website, including tips to avoid tax season fraud, ways to safeguard personal information, and a free directory of federal tax preparers.
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