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Cohen Bill Would Help Protect Consumers from Fraudulent Tax Preparers Like Mo’ Money

March 25, 2015

[WASHINGTON, DC] – With the April 15th federal tax filing deadline approaching, Congressman Steve Cohen (TN-09) today reintroduced his Tax Return Preparer Accountability Act to protect consumers from unscrupulous tax preparation businesses like Mo’ Money Taxes. The legislation would give the Internal Revenue Service (IRS) explicit authority to ensure that paid tax preparers, 40% of which act fraudulently according to the New York Times, are adequately trained and maintain high standards of integrity. Congressman Cohen’s bill is cosponsored by Representatives Robert “Bobby” Scott (VA-03) and Carolyn Maloney (NY-12) as well as Congresswoman Eleanor Holmes Norton (DC).

“Throughout the country, Mo’ Money was caught defrauding honest taxpayers with outrageous fees and cheating them out of the refunds they deserved,” said Congressman Cohen. “I’m glad that the Department of Justice shut them down so they can’t prey on Memphians anymore, but there remain many other fly-by-night tax preparers just like them that trick hardworking Americans out of their refunds and rarely face any consequences. My Tax Return Preparer Accountability Act would help stop these dishonest business practices and protect the pocketbooks of middle-class families and the federal treasury alike.”

In September 2013, a federal court permanently barred the owners and a former manager of Mo’ Money Taxes from preparing tax returns for others and owning or operating a tax return preparation business. Mo’ Money had been the subject of a U.S. Department of Justice Tax Division lawsuit seeking to shut the business down. The suit also accused its owners of creating and maintaining a business environment that encourages the preparation of fraudulent federal income tax returns. Had Congressman Cohen’s Tax Return Preparer Accountability Act been law at the time, perhaps the federal suit—and the harm caused to taxpayers by Mo’ Money—could have been avoided entirely.

"Too many of my constituents have been impacted by tax preparers who failed to uphold professional standards – the most notorious of course was Mo' Money Taxes," said Congressman Scott. "This bill will make sure that the Internal Revenue Service has the necessary authority to ensure that paid tax preparers maintain a minimum level of professional conduct. I commend Congressman Cohen for introducing the Tax Return Preparer Accountability Act and I am pleased to join as a cosponsor. I hope that Congress will quickly act on this bill to protect tax payers from these scams."

Congressman Cohen, who is a cosponsor of the Earned Income Tax Credit Improvement and Simplification Act, also reminded Memphians today that eligible citizens can boost their tax refund by an average of $2,400 by claiming the Earned Income Tax Credit (EITC) on their federal tax return. Citizens who earned less than $52,427 while working last year could be eligible for as much as $6,143 through the EITC, which helps working Americans keep more of the money they have earned. In recent years, as much as $70 million in potential tax refunds was left on the table by area taxpayers who failed to claim the EITC. In the past, citizens may have found the EITC too complex to be worth the trouble of claiming, but the IRS has made an online EITC Assistant tool, located at www.irs.gov/eitc, available to those seeking to quickly and easily determine their eligibility. Those with income less than $52,427 also qualify for free tax return preparation from local IRS-certified preparers, a list of which can be found here.

“Whether it’s an unclaimed refund or an often-overlooked credit or deduction, Memphians deserve every penny they are owed from the federal government,”said Congressman Cohen.“With families struggling just to make ends meet, the extra money can help put food on their tables, a roof over their heads, or help pay off student loan and other debt. With just a few days left before the filing deadline, the citizens of Shelby County should do all they can to ensure they aren’t leaving money on the table by not claiming the EITC or missing out on the chance to collect unpaid refunds.”