Brooklyn Tax Preparer Permanently Banned Over Alleged Fraudulent Practices

May 19, 2023

In a stern warning to small business owners and taxpayers alike, a federal court in the Eastern District of New York has permanently prohibited Brooklyn-based tax return preparer Melida Portorreal and her business, International Travel Multi & Tax Corp., from preparing federal tax returns for others and from any future involvement in tax return preparation businesses.

Portorreal, according to the civil complaint filed against her, allegedly engaged in numerous fraudulent activities including falsifying filing statuses, creating fictitious itemized deductions and business expenses, and claiming non-deductible expenses to obtain the earned income tax credit and child tax credit.

The complaint alleges these fraudulent activities led to losses for the United States exceeding $1 million each year for tax years 2018, 2019, and 2020. Portorreal, alongside her company, consented to the court injunction which also enables the United States to conduct post-judgment discovery to ensure compliance with the injunction.

The court order mandates that Portorreal notify every individual for whom she prepared federal tax returns, amended tax returns, or claims for refund from February 25, 2021, through May 31, 2022, about the injunction. Furthermore, an electronic copy of the injunction must be posted on any business social media profile they maintain or create in the next five years.

This case serves as a critical reminder for small business owners to remain cautious while choosing a tax return preparer. As Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division announced the case’s resolution, it was also pointed out that the IRS, through its ‘Dirty Dozen’ series, had warned about the risk of fraudulent tax return preparers.

The IRS provides resources on its website to help taxpayers make informed decisions when selecting a tax return preparer, including a free directory of federal tax preparers. The agency also provides ten tips to avoid tax season fraud and strategies to protect personal information.

Over the past decade, the Department of Justice Tax Division has secured injunctions against hundreds of unethical tax preparers. Information about these cases can be found on the Justice Department’s website. For those who suspect an injunction might be being violated by someone in this listing, the Tax Division encourages contact with relevant details.

Small business owners should heed this news as a wake-up call to ensure they hire ethical, competent tax preparers. The financial implications of tax fraud are substantial, impacting not only individual businesses but also the overall economy. Vigilance and prudent decision-making are essential, particularly during tax season.

Image: Depositphotos

This article, “Brooklyn Tax Preparer Permanently Banned Over Alleged Fraudulent Practices” was first published on Small Business Trends



Leave the first comment