Alleged Tax Fraud Prompts Injunction Against California Woman

Because of alleged tax fraud, California resident Maria Teresita Viray may no longer prepare federal tax returns for others, according to the federal judge who recently issued a permanent injunction against Ms. Viray. Ms. Viray consented to the injunction, which also requires her to provide the federal government with a list of all the individuals for whom she prepared tax returns between 2007 and 2010. Maria Viray operated three different tax preparations businesses: TVDM Tax Services, New Horizon Tax Services, and MTV Tax Services. Since 2008, Ms. Viray’s businesses have prepared thousands of individual federal income tax returns.

Ms. Viray is accused of reporting fabricated deductions for business expenses and charitable contributions on her clients’ tax returns. She also falsified documents to support the bogus deductions. The false claims made by Ms. Viray on behalf of her clients cost the federal government more than $45 million in lost tax revenue between 2008 and 2010. The IRS incurred additional costs in uncovering the fraud and collecting improper refunds, unpaid taxes, and penalties from Ms. Viray’s customers.

Tax fraud is a major problem for the government. Based on a relatively new law, when a whistleblower reports tax fraud that involves more than $2 million, he or she may be entitled to a portion of the government’s recovery. If an individual is perpetrating the fraud, that person must make at least $200,000 per year.