- The Washington Times - Thursday, March 7, 2002

The Justice Department yesterday filed civil complaints in Virginia and Mississippi to stop tax-return preparers from filing income-tax returns claiming bogus refunds based on a supposed tax credit for slavery reparations.
The complaints, filed in U.S. District Courts in Richmond and Jackson, Miss., also seek to require the tax preparers to give the government the firms' complete client lists, noting that the Internal Revenue Service has recently seen a surge in what the Justice Department described as "these frivolous claims."
In January, the IRS announced it received nearly 80,000 returns in 2001 claiming more than $2.7 billion in false reparation refunds. The complaints name Robert L. Foster in Richmond and Andrew L. Wiley in Jackson, saying they are responsible for some of the false claims.
"We hope the courts act promptly to stop the promotion of this fraudulent tax scheme," said Assistant Attorney General Eileen J. O'Connor, who heads the Justice Department's tax division. "People who prepare fraudulent returns are risking penalties and possible prosecution not only for themselves, but also for the people whose returns they prepare. Filing a return claiming slavery reparations is illegal."
According to the complaints, the two defendants prepared and filed returns and amended returns claiming bogus refunds ranging from $8,000 to $500,000 per client, based on tax credits for reparations for slavery or segregation.
Justice Department officials said no provision in the federal tax code allows such credits or refunds. Mr. Wiley was named in connection with as many as 3,910 returns claiming a total of approximately $168 million in improper reparation refunds. Mr. Foster was accused of preparing bogus reparation claims exceeding $2 million.
The IRS has issued public warnings about the reparations tax scam.
In January, IRS Commissioner Charles O. Rossotti said promoters were "shamelessly preying upon people," describing the tax preparers as "snake-oil salesmen who build false hopes and charge people good money for bad advice on reparation refunds.
"In the end, the victims discover their refund claims are rejected, and their money and the promoters are long gone," he said.
Some promoters of the reparations scam have been charged criminally. In October, Vernon T. James of Carrollton, Texas, was convicted of preparing false, fictitious and fraudulent personal federal income-tax returns for preparing tax returns claiming the reparations credit. In January, a federal judge sentenced James to 6 years in prison and ordered him to pay $1.2 million in restitution.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide