FEDERAL COURT BARS NORTHERN VIRGINIA CPA FROM PREPARING FEDERAL TAX RETURNS

John T. Hoang of Woodbridge, Va., Also Barred From Promoting Tax Scheme

WASHINGTON – A federal court has barred John T. Hoang of Woodbridge, Va., from preparing federal tax returns, the Justice Department announced today. Under the civil injunction order, to which Hoang consented, he is also permanently barred from promoting what the government in court papers called a tax fraud scheme. According to the government complaint, Hoang is a certified public accountant who promoted a scheme in which customers purchased worthless investments in Web sites, which Hoang used to claim fraudulent deductions on customers’ federal income tax returns.

The complaint alleged that Hoang, through his company Tax Smart Technology Services, sold customers Web sites worth almost nothing. But the sales contracts between Tax Smart and customers falsely stated that the Web sites were worth tens of thousands, hundreds of thousands or even millions of dollars. Hoang then allegedly prepared customers’ federal income tax returns, improperly using the false values to claim large depreciation deductions. The lawsuit asserts that Hoang used offsetting sham promissory notes to create the appearance of sales of valuable assets, while in reality customers paid Hoang a small sum and Hoang then provided customers a worthless Web site and a large tax deduction. The government complaint estimates that the harm from Hoang’s misconduct exceeds $6.1 million.

“Tax professionals who promote tax scams can expect to be put out of business,” said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. “The Internal Revenue Service and Justice Department are committed to stopping the spread of tax-fraud schemes.”

Since 2001, the Justice Department has obtained injunctions against more than 330 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.