Judicial Clampdown: Detroit Tax Preparer and Businesses Banned in Fraudulent Return Scheme

A federal court in Detroit has issued a permanent injunction against Annetta Powell and her seven associated tax preparation entities: 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. This injunction prohibits them from preparing federal tax returns for others and from managing or owning any tax return preparation business. Additionally, the defendants are required to return $689,797.91 to the United States, which represents profits earned from preparing fraudulent tax returns between 2019 and 2021.

This ruling came after a detailed twelve-day trial stretching from November 2023 to January 2024. U.S. District Judge Mark A. Goldsmith of the Eastern District of Michigan emphasized the extensive nature of the fraudulent activities, noting violations of IRS regulations across all of Powell’s operations. Powell’s businesses, which operated in Detroit, Pontiac, and Flint, were implicated in a tax preparation fraud that spanned nearly a decade, under various names including “The Tax Experts” and later “Speedy Tax Stores.”

The court found the fraudulent actions to be neither isolated nor accidental, pointing out the systematic preparation of tax returns with recurring irregularities. It highlighted Powell’s lack of cooperation with IRS investigations, her manipulation of client files and tax returns, and the illicit use of Electronic Filing Identification Numbers (EFINs) due to her criminal history. This pattern of behavior led the court to conclude that Powell was likely to continue committing fraud if not stopped by legal means.

The announcement was made by Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division, with the IRS conducting the investigation. The case was prosecuted by Trial Attorneys Bradley Sarnell, Elizabeth Kirby, Daniel Applegate, Thelma Lizama, Eric Ashby II, and Steven Shashy from the Justice Department’s Tax Division.

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