OIG Investigative Reports, Little Rock AR February 02, 2011 - ASH FLAT Tax Preparers Indicted on Multiple Tax and Fraud Charges Skip to main contentAbout UsContact UsFAQs Language Assistance Englishespañol中文: 繁體版Việt-ngữ한국어TagalogРусский U.S. Department of Education Search for: Toggle navigation U.S. Department of Education Student Loans Grants Laws Data About ED OFFICES Home Reports & Resources Programs/Initiatives News Office Contacts Investigative Reports United States Department of Justice The United States Attorneys Office Eastern District of Arkansas United States Attorney's Office 425 West Capitol Avenue Suite 500 Little Rock, AR 72201 Telephone: (501) 340-2600 Fax Line: (501) 340-2728 ASH FLAT Tax Preparers Indicted on Multiple Tax and Fraud Charges February 2, 2011 Little Rock - Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas; Christopher R. Pikelis, Special Agent in Charge of the Internal Revenue Service Office of Criminal Investigations Nashville Field Office, Robert Feldt, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Dallas Field Division, Thomas D. Utz, Jr., Special Agent in Charge, Central Region, and John McDermott, Special Agent in Charge, Veterans Administration Office of Inspector General, South Central Field Office, announced that James Bruce Morris, age 65, and his wife, Karen Sue Morris, age 48, the operators of B. Morris Ltd. tax preparation services in Ash Flat, Arkansas, were indicted today by a federal grand jury. The indictment charges James Bruce Morris with two counts of theft of funds and one count of concealment of a material fact related to Social Security funds, one count of conspiring to defraud the government, five counts of obtaining Title IV Department of Education Funds by fraud and false statements, six counts of filing false tax returns; and twenty-two counts of causing another to file a false tax return. The indictment charges Karen Sue Morris with one count of aiding and abetting in the theft of social security funds, one count of conspiring to defraud the government, five counts of filing false tax returns, and nine counts of causing another to file a false tax return. The charges of fraud on the Social Security Administration stem from James Morris’s receipt of Social Security Disability benefits and allege that he concealed his employment and his receipt of income from his tax preparation business from 2002 to the present, and that he, aided and abetted by Karen Sue Morris, made affirmatively dishonest statements to the SSA for purpose of fraudulently obtaining benefits. Similarly, the charges related to the fraud on the Veterans Administration allege that Morris concealed his self-employment from the Veterans Administration in an effort to fraudulently obtain disability payments from the VA. The charge against both Morrises of conspiring to defraud the United States alleges a scheme in which Karen Sue Morris under-reported her income and filed her tax return as if she were not married to James Bruce Morris in order to receive the Earned Income Tax Credit, a credit intended for certain low income tax payers. James Bruce Morris would then file his individual tax return as if he were single, and he too, would under-report his actual income in various ways. Supported by these fraudulent tax returns, Karen Sue Morris would then submit false free applications for federal student aid for two of her daughters who were seeking Pell Grants to help fund their college educations. The substantive false tax return counts and the counts regarding obtaining grant money from the Department of Education based on false and fraudulent representations stem from this same scheme. Finally, the charges of causing others to file false tax returns relate to the Morrises’ tax preparation service B. Morris Ltd. The indictment alleges that Karen Sue Morris aided and abetted in the preparation of fraudulent returns for several clients in connection with claiming the Earned Income Tax Credit, as Ms. Morris did for herself. James Bruce Morris is charged with causing others to file false tax returns in various ways including overstating deductions and under-reporting income. "Return Preparer fraud is a priority for IRS Criminal Investigation and we have committed many resources to investigating and prosecuting cases just like these," said Christopher Pikelis, Special Agent in Charge, IRS-Criminal Investigation-Nashville Field Office. "Taxpayers should be very selective in choosing a return preparer, and have confidence knowing that person will prepare accurate tax returns and safeguard their financial information.” The maximum statutory penalty for theft of government funds is 10 years imprisonment and a $250,000 fine. The maximum statutory penalty for concealing a material fact regarding the receipt of Social Security funds, conspiring to defraud the government, obtaining Title IV funds by fraud and false statement is 5 years imprisonment and a $250,000 fine. The maximum statutory penalty for filing a false tax return and causing another to do the same is three years imprisonment and a $250,000 fine. This investigation was conducted by agents from the Internal Revenue Service Office of Criminal Investigations, the Social Security Administration Office of Inspector General, the Veterans Administration Office of Inspector General, and the Department of Education Office of Inspector General. The case is being prosecuted by Assistant United States Attorneys Laura G. Hoey and John Ray White. An indictment contains only allegations. The defendants are presumed innocent unless and until proven guilty. Top Printable view Last Modified: 03/01/2011 How Do I Find... Student loans, forgiveness College accreditation No Child Left Behind FERPA FAFSA 1098-E Tax Form 2015 Budget Proposal More > Information About... 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ASH FLAT Tax Preparers Indicted on Multiple Tax and Fraud Charges. Little Rock, AR., February 2, 2011
Published by the Department of Education, Office of Inspector General on 2011-02-02.
Below is a raw (and likely hideous) rendition of the original report.