Last week, a federal court in the Eastern District of New York permanently shut down a Brooklyn-based tax return preparation business, the U.S. Department of Justice's Tax Division announced.
According to a civil complaint filed in the case, it is alleged that Melida Portorreal, through her Brooklyn company International Travel Multi & Tax Corp, prepared a number of false federal income tax returns for customers.
Among the fraudulent acts that Portorreal allegedly engaged in, according to the complaint, include inputting incorrect itemized deductions to reduce taxable income, fabricating business expenses, claiming non-deductible expenses on customers’ tax returns for the purpose of obtaining entitlement to the earned income tax credit and the child tax credit, as well as reporting false filing statuses — including an instance in which Portorreal allegedly used one customer’s name and social security number to qualify another customer for Head of Household filing status without either person's knowledge or consent.
The civil complaint further alleged that the IRS determined that Portorreal's submitted returns for the tax years 2018, 2019 and 2020 resulted in over $1 million in losses for the United States in each year.
Along with the shuttering of her business, the federal court has also barred Portorreal from owning, operating or working for any tax return preparation business in the future, according to the release.
As part of the court's injunction ruling, Portorreal and her company have been ordered to send a notice of the injunction to each person that they prepared tax returns or refund claims for between Feb. 25, 2021 through May 31 2022.
In addition, Portorreal will also have to post an electronic copy of the injunction on any business social media profile that is currently maintained or created over the next five years.
Over the past decade, the U.S. Department of Justice's Tax Division says that it has filed injunctions against hundreds of tax preparers. Information about these cases can be found on the Justice Department's website.
