Baton Rouge tax preparer Larry Carnell Dixon Sr., alleged by federal attorneys to have helped inflate customers’ tax deductions in ways that cost the federal government as much as $39 million, has agreed to get out of the business.
Justice Department attorneys announced Tuesday in Washington, D.C., that Dixon agreed to a permanent injunction that bars him and his firm, Dixon’s Tax Service LLC, from tax-preparation work forever. Dixon did not, however, admit to any wrongdoing on his part or that of his company.
The injunction, signed in Baton Rouge by U.S. District Judge Frank J. Polozola, does not prevent federal officials from pursuing any “civil or criminal matters” against Dixon and Dixon’s Tax Service LLC, which had offices in Baton Rouge and Gonzales.
The injunction also does not prevent Dixon or his firm from fighting any possible IRS penalties or other civil or criminal cases the government may initiate.
Polozola also ordered Dixon and his firm to give federal attorneys the returns or claims for refunds of all customers for whom they prepared federal income tax returns after Jan. 1, 2006.
Justice Department trial attorney Steven C. Woodliff, of Washington, D.C., and Assistant U.S. Attorney John J. Gaupp, of Baton Rouge, filed a suit 11 months ago, asking for an end to Dixon’s tax-preparation career.
A sample of 198 of the returns Dixon and his firm prepared for the 2008 and 2009 tax years showed false information that cost the federal government $885,024, according to the suit filed by Woodliff and Gaupp.
That sample was from a four-year period in which Dixon’s Tax Service prepared 8,789 returns, court records show.
Because 194 of the 198 sampled returns revealed false information, the federal attorneys alleged that combined government losses for the 2007-2011 filing seasons could total $39 million.
Through court filings signed by defense attorney John S. McLindon, Dixon and his company denied all allegations of wrongdoing.