How we arrive at the Order obtained in Baton Rouge, Louisiana, last week is somewhat convoluted.

Whylithia R. Robinson owned and operated a business known as AAA Tax Service LLC, a name in a form that is often used by businesses to ensure they appear at the top of alphabetical listings. It's a hangover from when Yellow Pages was the first point of reference for anyone seeking business services.

In January 2023, the DoJ's Tax Division "filed a complaint" - which appears to be a civil suit not a prosecution - against Robinson and her company alleging that, from 2019-2012 she prepared and submitted some 2,629 income tax returns for what the DoJ, in a passive-aggressive style, terms "customers" not "clients."

The complaint alleges "that Robinson displayed a pattern of filing tax returns during this period that understated the customer’s tax liabilities and overstated tax refunds by fabricating business losses, claiming false charitable donations, or falsely claiming education credits for customers who were not entitled to them."

In April 2023, the Court issued a judgment in default and issued an injunction that Robinson and AAA Tax Services PLC do not prepare tax returns for others.

Not a crime

That didn't stop her and in March 2025 the Court found that she had filed 227 tax returns since the injunction and for that was paid some USD68,100 in fees. Upon application of the DoJ, she was found to be in contempt of the Order made in April 2023. The DoJ specifically states that it is "civil" contempt. 

Here's where it gets murky: the Court ordered Robinson and her company to surrender (the USA uses the term "disgorge") the amounts received as fees. This is not a fine because neither Robinson nor the company have been convicted of an offence. In addition to surrendering fees received, there was an order for litigation costs and travel expenses incurred during the investigation and litigation, an oddly specific form of order.

A dedicated team

The Department of Justice Tax Division has several specific tax related functions and powers. 

One of those is a dedicated task force for identifying and taking action against those who run a service of preparing false - and therefore fraudulent - tax returns. It claims success against "hundreds" of such businesses. Certainly, there has been a steady stream of information notices about orders and the DoJ provides a wealth of publicly available information about who is, and is not, permitted to provide such services.

Taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS has information on its website for choosing a tax return preparer and has launched a free directory of federal tax preparers. The IRS also offers 10 tips to avoid tax season fraud and ways to safeguard personal information.

In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be breaking an injunction, please contact the Tax Division with details.

For Robinson the story - and trouble - doesn't end there. When she completes the tax returns for herself and for AAA, she's going to have to declare those fees as income. The surrender and costs and disbursements due under the Order are not business expenses so she cannot claim a set-off. Even worse, if the Inland Revenue Service takes action against those whose forms were submitted, and as a result, they are worse off, there is at least the prospect, it being America, that some will make a civil claim against her. 

AAA is an example of a company set up or adapted for the purpose of committing financial crime even though Robinson has not been charged with an offence. The facts alleged are clearly at least a fraud on the Treasury and therefore her fees are proceeds of that conduct; there is also the issue of conspiracy. 

Terminology:

The surrender (or disgorgement) of assets is, in law, different to confiscation. Surrender requires the defendant to give up property while confiscation authorises prosecutors to collect it. The nett effect is the same: assets, property or other benefits pass from the defendant to the state. 

This case study is extracted from Trade Based Financial Crime Volume 2, to be published in April 2025.