Date: March 17, 2020
On March 17, 2020, a federal court in Tampa, Florida, found that Jasen Harvey and Harveys Tax Service violated preliminary and permanent injunctions that barred them from preparing, filing, or assisting in the preparation or filing of federal tax returns for others.
For that violation, the court held Jasen Harvey and Harveys Tax Service in contempt and ordered them to pay $19,550 to the United States, representing the fees Jasen Harvey and Harvey's Tax Service received for 92 tax returns they prepared or filed in violation of the court's injunctions. In addition, the court ordered those defendants to reimburse the government for $631.04 in travel costs the United States incurred to attend the contempt hearing held on March 13, 2020.
The United States filed a complaint against Catharine Harvey, Jasen Harvey, and Harveys Tax Service on Jan. 9, 2020. According to the complaint, the defendants prepared returns for customers seeking millions of dollars in refunds of tax purportedly withheld on fictitious income reported on fabricated Forms 1099-MISC and on bank deposits reported on fabricated Forms 1099-A. On Feb. 18, 2020, the court issued a preliminary injunction that barred the defendants from preparing returns for customers, finding that the United States offered sufficient evidence to show that defendants had a history of filing fraudulent refund claims, and were likely to continue to file fraudulent returns absent a court order to stop. The court issued a permanent ban on Feb. 24, 2020, finding the defendants "unfit" to prepare tax returns.
The court found that the United States demonstrated by clear and convincing evidence that the defendants willfully violated these court orders, which unambiguously barred the defendants from preparing returns for others. In addition to the monetary sanctions, the court ordered that it will sentence Mr. Harvey for his willful contempt at a hearing on July 9, 2020.
Return preparer fraud is one of the IRS' Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers.