TAX NEWS - June 2010

South Carolina Tax: Court bars S.C. man from income tax work

A federal court in Columbia has barred a Blythewood man from ever preparing federal income taxes for others again.

The federal government last year sued Winston Able on accusations he filed returns claiming $13 million in fraudulent refunds in 2008. Some of his clients were assessed $5,000 penalties for filing frivolous documents with returns and they might have to pay 20 percent of a refund they improperly claimed — even if they did not receive the requested money from the IRS.

Federal documents called the actions a "redemption" scheme.

"It is based on a frivolous theory that the government commits a fraud when it attempts to collect tax debts and that this purported fraud allows people to 'charge back' debts that the government purportedly owes to them," a U.S. Department of Justice press release said.

The government's complaint last year said the scheme is part of a growing trend among tax protesters to file frivolous tax returns and forms in an attempt to escape their federal tax obligations and steal from the U.S. Treasury.

Efforts Tuesday to contact Able, who ran Reliable Services in Columbia near Windsor Lake, were unsuccessful.

Last year, Able said he was not a tax preparer, but a notary, and never sent customers' documents to the IRS. He called Reliable Services a counseling business.

However, in court records barring Able from preparing returns for others, the Justice Department said Able filed documents "conditionally accept(ing)" the government's order and conceding the allegations of the complaint.

It is unclear from court documents whether his clients knew what Able was doing was potentially illegal. In at least one case, the tax returns were not reviewed or signed by a client from Ridgeway, the government said.

The Justice Department said it identified 200 forms Able submitted last year that contain fraudulent refund claims totaling more than $13 million, according to court documents. His clients were from as far away as Florida, the government said.