Opinion ID: 2756585
Heading Depth: 2
Heading Rank: 1

Heading: Barber’s Tax Preparation Business: 2006-2009

Text: In order to electronically file tax returns for clients, a tax preparer must obtain an Electronic Filing Identification Number (“EFIN”) from the IRS. In September 2005, Barber applied for an EFIN for his tax preparation business, Kenneth Barber & Associates (“KBA”), but was denied. Two weeks after the IRS denied Barber’s application, Barber’s daughter applied for an EFIN and was approved for her tax preparation business, KLB Group Developers, Inc. (“KLB Group”). Barber’s daughter then contracted out KLB Group’s business to Barber. All of the fraudulent tax returns submitted electronically by Barber’s business were filed using KLB Group’s assigned EFIN. Defendant Barber, who owned and operated both KLB Group and KBA, opened an office on West Brevard Street in Tallahassee, Florida. Barber hired multiple employees to work in his office as tax return preparers, including Shavita Davis, Anthony Barber (“Anthony”), Hope Wynn, and Shericka Jennings, all of whom testified against Barber at trial. Before working for Barber, Davis, Anthony, Wynn, and Jennings had no prior experience preparing tax returns. Barber paid his employees an hourly wage that did not exceed $10 per hour. Davis worked for defendant Barber from 2005 to 2009. During her employment, Barber taught Davis how to do the following to client tax returns: reuse fraudulent information from previous years’ returns; report false household 3 Case: 13-13023 Date Filed: 12/02/2014 Page: 4 of 32 help (“HSH”) income in round numbers such as $2500, $3500, $4500, $5500, $6500, and $7500 to generate the largest possible refund; report false Schedule C 1 income and expenses; inflate wages; create fictitious employee W-2s using employer identification numbers found online; and claim deductions for false dependents. Davis would find dependents to claim on the return and charge the client between $500 and $1500. Barber later told Davis to teach Anthony how to sell false dependents (i.e., “how to hustle”). Defendant Barber told Davis to input $2500 to maximize the education credit on “just about” every return and to falsify other credits, such as childcare expenses and Schedule A deductions. Barber asked Davis to train several other employees how to prepare false returns, including Anthony, Wynn, and Jennings. Barber charged clients higher preparation fees for returns containing false information. When clients questioned the fees, Barber instructed Davis to tell them not to complain because they did not make money anyway. Anthony, who is not related to defendant Barber, worked for Barber from 2007 to 2010. During Anthony’s employment, Barber’s office prepared between 500 and 1000 tax returns each year, about 90 percent of which were false. Barber referred clients to Anthony and other employees but also prepared returns himself. Normally, Barber electronically transmitted the returns to the IRS after Davis 1 Self-employed taxpayers report their business income and expenses on a Schedule C form. 4 Case: 13-13023 Date Filed: 12/02/2014 Page: 5 of 32 reviewed them for errors. All of the preparation fees received from clients went into business accounts controlled by Barber. Clients paid Barber an average of $300 for each return. Both defendant Barber and Davis trained Anthony to prepare false returns. Though Davis was more “hands-on” in her training, Barber had instructed Davis to train Anthony. On one occasion, Anthony told Barber that he was concerned Davis was stealing because a client gave Davis a large sum of cash. Barber laughed and told Anthony to “tell [Davis] to teach you how to hustle” and “show you what she knows.” Davis told Anthony that she had sold that client a false dependent for $1000, a practice Barber referred to as “hustling.” Davis and Barber gave Anthony numbers to report as false HSH income, a practice Barber encouraged because it increased the client’s refund amount. For the same reason, Anthony was trained to claim the maximum $2500 education credit and falsify other items such as filing status, childcare expenses, and charitable contributions. Barber eventually asked Anthony to train his other employees how to prepare false returns. Wynn worked for defendant Barber for about six weeks from December 2008 to January 2009. Barber, Davis, and another employee, Meshundra Turner, trained Wynn how to adjust Schedule C income to obtain the highest tax refund, regardless of the amount actually given by the client. 5 Case: 13-13023 Date Filed: 12/02/2014 Page: 6 of 32 Jennings, who worked for defendant Barber from August 2006 to April 2008, was aware that false returns were being prepared at Barber’s office. Barber trained Jennings to include false HSH income on tax returns and to claim education credits even if the client did not have an eligible student. While Jennings did not personally sell any false dependents, she knew that other preparers did so.