Justice Department Seeks to Stop South Florida Tax Preparers Who Allegedly Claim False Home Buyer Credits

Preparers Alleged to Repeatedly Claim Bogus First-time Home Buyer Credit

February 23, 2010 - WASHINGTON – The United States has asked a federal court to stop two Miami-based tax return preparers from improperly claiming the First-Time Home Buyer Credit, the Justice Department announced today. The government complaints filed in separate lawsuits in U.S. District Court in Miami allege that Paula Olivette Patrice and her business, To the Max Tax Professionals Inc.; and Henry Ernesto Medina Jr. and his business, Medina Group Inc., prepare returns for customers that falsely claim the credit.

Congress enacted the First-Time Home Buyer Credit in 2008 to strengthen the real estate market and help the economy. It allowed persons who have not owned a home in the previous three years to claim a credit of up to $8,000 against their federal income taxes if they bought a home after April 8, 2008. The credit has since been expanded to allow, under certain conditions, current homeowners to claim the credit for a purchase of a new home. But in order for a taxpayer to claim the credit a home must have actually been purchased.

The government complaints allege that Patrice and Medina claimed the credit on customers’ returns even though the customers had not purchased new homes. Patrice allegedly listed nonexistent addresses for property purportedly purchased, and in one instance, listed the same address on separate customers’ returns as the property purchased. Medina allegedly filed returns in March 2009 that falsely reported property as having been purchased months later.

"The Internal Revenue Service and Justice Department are committed to stopping abuse of the First-Time Home Buyer Credit," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division.

Last October a federal court in Texas permanently barred a woman from preparing returns for others in a case where the Justice Department alleged abuse of the Home Buyer credit and other tax law provisions.

Over the past decade, the Justice Department’s Tax Division has obtained more than 435 injunctions to stop tax fraud promoters and dishonest tax preparers. Information about these cases is available on the Justice Department Web site.