PLACERVILLE . INFO

By Denny Walsh dwalsh@sacbee.com Published: Friday, Mar. 6, 2009 - 12:00 am | Page 3B The Internal Revenue Service is in court trying to shut down a Placerville tax return preparer who allegedly assembled fraudulent returns, triggering refunds of at least $6.9 million to which taxpayers were not entitled. The agency filed a civil lawsuit Wednesday in Sacramento federal court asking for a permanent injunction against Teresa M. Marty and her business, Advanced Financial Services LLC, barring her from preparing returns for anyone but herself. An Internet profile of the business puts its estimated annual sales at $360,000. A woman who answered the phone at the business Thursday said Marty was "not available." When a reporter identified himself and said he was calling about the suit, the woman said, "That's interesting. She hasn't been served," and hung up. According to an e-mail on a Web site featuring "Tax Fraud, Tax Protesters, & Sovereign Citizen Scams," IRS agents raided Marty's office and Pollock Pines home on the morning of Jan. 21, "and took all computers, books and records pertaining to 1099s and its related processes." The agents said "they were conducting a criminal investigation," according to the e-mail. The IRS had no comment Thursday on the potential for criminal charges against the 49-year-old Marty. The e-mail says she believes that her methods are "real, accurate, and that, as a tax preparer for over 20 years, she and her staff prepared the forms correctly and accurately." The civil suit, on the other hand, says the agency has identified at least 110 returns prepared and/or filed by Marty in 2008 using fabricated IRS forms to report fictitious withholding and claim huge refunds. "Many of the refund requests … exceed $200,000, and one return requests a refund of $2.7 million," the suit states. "The total amount of refunds requested on those 110 returns is approximately $26.2 million. "As of Feb. 11," it alleges, "Marty has prepared at least 24 federal income tax returns in 2009. Of these 24 returns, 14 contain fraudulent refund requests based on frivolous IRS forms." The suit says Marty's scheme is part of a growing trend among tax protesters. It is rare for the agency to seek an injunction and is done only in extreme cases of process abuse. In the past 10 years, the IRS, through the Justice Department's Tax Division, has obtained injunctions against approximately 375 tax return preparers and tax fraud promoters. A suit similar to the one against Marty also was filed Wednesday in Columbia, S.C., against tax preparer Winston Able and his business, Reclaim Services. "Taxpayers foolish enough to consider participating in this illegal scheme should consider that, in addition to risking criminal prosecution, they also risk incurring civil penalties that could cause them to lose their homes and their savings," said John A. DiCicco, acting assistant attorney general for the Tax Division. "Taxpayers should remember they are ultimately responsible for what's on their tax returns," warned IRS Commissioner Doug Shulman. "If a promoter's sales pitch sounds too good to be true, be sure to check it out first."