Congressman Steve Cohen (TN-09) today applauded the U.S. Department of Justice (DOJ) for filing a civil injunction lawsuit seeking to shut down Mo' Money Taxes. The suit also accuses its owners of creating and maintaining a business environment that encourages the preparation of fraudulent federal income tax returns.
"Serious questions and concerns have been raised about the Mo' Money tax preparation firm in Memphis and other parts of the country," said Congressman Cohen. "The Congressional hearing I requested last June shed light on what Americans can do to prevent being taken advantage of from companies that are victimizing people through tax fraud. There is no room in Memphis for tax preparation scams that prey on the poor and middle class. Tax preparation firms that rip off citizens and government with fraudulent work should be punished as severely as possible under the law. I'm glad to see that the Department of Justice has responded to the concerns my constituents expressed about Mo' Money and is taking action."
Congressman Cohen is currently drafting legislation that would give the Internal Revenue Service (IRS) the power to regulate tax preparers like Mo' Money (a recent court case said the IRS does not have that authority and is currently being appealed). The Cohen measure would give the IRS direct authority.
During the hearing last June, Congressman Cohen discussed the Volunteer Income Tax Assistance (VITA) program and how the program could be improved and better publicized so people don't have to turn to tax preparation firms with questionable motives. The IRS program offers free tax help to people who make $51,000 or less and need assistance in preparing their own tax returns. At the hearing, Congressman Cohen also discussed whether the IRS should send tax refunds directly to taxpayers using tax preparation firms and whether there are possible legislative solutions to scams involving tax refund anticipations loans.
In March 2012, Congressman Cohen met with Congressman Robert "Bobby" Scott and a senior Justice Department official to follow up on their February 7, 2012 letter to Attorney General Eric H. Holder, Jr., requesting his office's assistance in addressing the problems their constituents were having with the Mo' Money tax preparation firm. In January 2012, both members' Congressional offices began receiving complaints from constituents regarding Mo' Money. The complaints alleged:
-bounced checks issued by Mo' Money for tax refunds;
-failure by Mo' Money to provide refunds the IRS had sent it for constituents who had filed their taxes through the company; and
-excessive fees deducted by the company from refunds, and other problems.