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Cohen Introduces Bill to Protect Consumers from Fraudsters Like Mo' Money

April 10, 2014

[WASHINGTON, DC] – As the April 15th federal tax filing deadline quickly approaches, Congressman Steve Cohen (TN-09) today introduced the Tax Return Preparer Accountability Act to protect consumers from unscrupulous tax preparation businesses like Mo’ Money Taxes in the United States House of Representatives. With a recent investigation finding fraud among as many as 40% of paid tax preparers, the Congressman’s bill—cosponsored by Congressman Robert “Bobby” Scott (VA-03)—would protect taxpayers from bad actors by giving the Internal Revenue Service (IRS) explicit authority to ensure that paid tax preparers are adequately trained and maintain high standards of integrity.

“In Memphis and across 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, but there remain many other fly-by-night tax preparers just like them that deceive hardworking Americans of their earned refunds with little risk of repercussions. My Tax Return Preparer Accountability Act would ensure that these shady and dishonest business practices cannot continue, 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 that was recently highlighted in a New York Times article—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 are sufficiently trained and maintain a certain 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 also today reminded Memphians that free tax filing assistance and guidance is available throughout Shelby County and he urged area taxpayers to ensure they claim every refund and credit they are eligible for. Last year alone, as much as $70 million in potential tax credits were left on the table by area taxpayers who did not claim the Earned Income Tax Credit (EITC), and there remains nearly $13 million in unpaid refunds owed to 16,000 Tennessee citizens who have not yet filed their returns for the 2010 tax year. In order to collect unpaid refunds from prior tax years, taxpayers must file a return within three years, meaning 2010’s unpaid refunds will expire if not claimed by April 15th. If taxpayers are owed a refund, there is no penalty for filing a late return. A listing of assistance locations and hours of operation is available at https://cohen.house.gov.

“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 or missing out on the chance to collect unpaid refunds. Free tax filing assistance is available throughout the Ninth District, and Memphians can visit https://cohen.house.gov for hours and locations.”