Justice Department Seeks to Shut Down Tax Operations of Reid and Santana

U.S. Justice Department Seeks Shutdown of Florida Tax Preparers Over Alleged Fraud

The U.S. Department of Justice has filed a complaint in federal court seeking to shut down the operations of tax preparers Cedric Reid and Juan Santana, along with their business Advance Tax Group Inc., citing widespread fraudulent practices that allegedly cost the government more than $7 million in lost tax revenue.

The legal action, filed in the Southern District of Florida, aims to permanently bar the defendants from preparing federal income tax returns for others. The tax preparation business operates from locations in Daytona Beach and Ocala, Florida, where authorities claim the preparers systematically included false information on client tax returns.

According to court documents, Reid and Santana engaged in multiple deceptive practices designed to artificially reduce their clients’ tax obligations or generate unwarranted refunds. The alleged schemes included manipulating filing statuses, fabricating or inflating business expenses, and reporting fictitious business losses to lower taxable income.

Investigators found that the preparers frequently claimed improper tax credits, including fuel tax credits and education credits for which their clients did not qualify. A particular focus of the complaint involves the misuse of the Earned Income Tax Credit (EITC), a benefit designed specifically to assist low- to moderate-income workers.

“The defendants not only claimed improper EITC amounts, but also failed to follow the IRS’s mandatory due diligence requirements when preparing these claims,” said a Justice Department official familiar with the case.

The government estimates the tax loss resulting from these practices exceeded $7 million in just 2023 and 2024, a figure that includes both underpaid taxes and improperly issued refunds. The announcement was made by Joshua Wu of the Civil Division’s Tax Litigation Branch, with attorneys Meredith Hollman and Amanda Cornwell handling the case.

This enforcement action comes as part of a broader effort by federal authorities to combat tax preparation fraud. Over the past decade, the Justice Department has secured injunctions against hundreds of tax preparers engaged in fraudulent practices. The department maintains a public registry of individuals and businesses barred from preparing tax returns or promoting tax schemes.

Tax professionals note that the timing of this case aligns with increased scrutiny of tax preparation practices nationwide. “The IRS and Justice Department have been intensifying their focus on preparers who systematically abuse credits and deductions,” said Melissa Labant, a tax policy specialist with the American Institute of CPAs, who is not involved in the case. “This reflects concerns about the tax gap—the difference between taxes owed and taxes collected.”

The case also highlights the potential risks for taxpayers who use professional preparation services. Despite paying someone else to prepare their returns, taxpayers remain legally responsible for all information submitted to the IRS.

The Justice Department reminds consumers to exercise caution when selecting tax preparers. The IRS offers a free online directory of federal tax preparers to help taxpayers find qualified professionals. Red flags include preparers who promise unusually large refunds, base fees on refund amounts, or refuse to sign returns they prepare.

Federal authorities encourage the public to report suspected tax preparer fraud. Anyone who believes an enjoined preparer continues to operate in violation of a court order is asked to contact the Civil Division’s Tax Litigation Branch with detailed information.

The court has not yet ruled on the government’s request for an injunction against Reid, Santana, and Advance Tax Group Inc. If granted, the order would immediately halt their tax preparation activities while the case proceeds.