DOJ Tax Enforcement in 2026: Six Recent Criminal and Civil Actions
Recent Department of Justice actions show continued federal attention to dishonest return preparers, employment-tax violations, fraudulent refund claims, and businesses accused of systematically exploiting federal tax credits and deductions.
That enforcement is occurring through two distinct parts of DOJ.
On the criminal side, the newly created National Fraud Enforcement Division has expressly identified “internal revenue” as one of its five principal enforcement priorities.
Separately, the Civil Division’s Tax Litigation Branch continues to bring injunction actions seeking to remove allegedly fraudulent return preparers from the industry.
The Fraud Division’s priorities memorandum addresses criminal enforcement; it does not apply to the Civil Division or its Tax Litigation Branch. But recent activity from both components demonstrates that DOJ continues to use separate criminal and civil tools to address suspected tax fraud.
Taken together, these actions reflect an emphasis on repeat conduct, large-scale refund claims, false tax credits, and evidence of willfulness—particularly conduct continuing after direct contact from the IRS.
The six recent matters discussed below—three criminal prosecutions and three civil injunction actions—illustrate how those priorities are being implemented.
DOJ Identifies Criminal Tax Enforcement as a National Priority
On August 13, 2026, Assistant Attorney General Colin M. McDonald issued a memorandum identifying “internal revenue” as one of the National Fraud Enforcement Division’s five principal enforcement priorities.
The memorandum describes criminal tax enforcement as an integral part of the Division’s responsibility to protect public funds. It identifies dishonest return preparers, concealed income, false returns, and abusive tax-scheme promoters as enforcement targets.
DOJ also announced that the Division intends to pair “the full arsenal of criminal tax tools” with data analytics, financial forensics, and nationwide coordination. The stated objective is to identify tax misconduct earlier and pursue offenders more efficiently.
The memorandum is significant because it does more than reaffirm that DOJ will prosecute tax crimes. It places internal-revenue enforcement within the broader mission of a national fraud component that DOJ says will have substantial personnel, technological resources, and data-analysis capabilities.
Read DOJ’s August 13, 2026 enforcement memorandum.
Three Recent Criminal Tax Cases
Pennsylvania Business Owner Charged in Employment-Tax Case
On August 20, 2026, DOJ announced a superseding indictment against the owner of a Pennsylvania labor-leasing company. The government alleges that the defendant participated in a scheme to underpay more than $7 million in employment taxes owed by the company.
According to the indictment, the defendant supplied temporary workers to other businesses. Prosecutors allege that the defendant underreported the number of company employees and the wages paid to them. DOJ further alleges that many of the workers were not authorized to work in the United States.
The government also claims that the defendant caused the company to file false corporate income-tax returns that substantially understated the company’s gross receipts and inaccurately identified another person as a 50-percent owner, even though the defendant allegedly owned the entire company.
The defendant is charged with conspiracy to defraud the United States, thirteen counts of willfully failing to collect, account for, and pay over employment taxes, and four counts of aiding and assisting in the preparation of false tax returns.
Alabama Return Preparer Charged in Alleged $65 Million Refund Scheme
On August 19, 2026, DOJ announced an indictment charging a Birmingham tax-return preparer with thirty counts of aiding and assisting in the preparation of false tax returns and three counts involving his own allegedly false returns.
The defendant owned a professional services company. According to the indictment, the defendant prepared returns falsely reporting that clients had incurred qualified geothermal heat-pump property costs. Those representations allegedly generated refunds to which the clients were not entitled.
DOJ claims that the defendant and his business submitted returns seeking more than $70 million in refunds and that the government paid approximately $65 million. Federal agents allegedly believe that most of those refunds were based on false returns.
The indictment also alleges that the defendant underreported income from his preparation business on his personal returns. But its most consequential allegation may be that the defendant altered aspects of his operation and continued the alleged scheme after the IRS executed a search warrant at the business.
Nevada Preparers Charged with Filing Returns for Allegedly Fictitious Businesses
On July 23, 2026, DOJ announced that three Las Vegas return preparers had been charged with conspiring to defraud the United States and preparing false returns for clients.
DOJ alleges that the defendants prepared returns reporting businesses that did not exist. In other instances, the returns allegedly reported fabricated receipts and expenses for businesses that did exist.
The defendants also allegedly claimed false tax credits based on representations that clients had missed work because they contracted COVID-19 or cared for others who had. DOJ alleges that the resulting returns generated refunds to which the clients were not entitled and that a portion of those refunds was paid as preparation fees
Each defendant faces one conspiracy charge and multiple counts of aiding and assisting in the preparation of false returns.
Recent Civil Tax Injunction Actions
The following matters arise from a different part of DOJ and involve a different enforcement mechanism. Rather than seeking criminal convictions or imprisonment, the Civil Division’s Tax Litigation Branch generally relies on statutory authority allowing federal courts to enjoin return preparers whose conduct interferes with the administration of the internal revenue laws.
New Jersey Preparer Permanently Barred from the Tax-Preparation Industry
On August 21, 2026, DOJ announced that a federal court had entered a permanent injunction against New Jersey return preparer Roxanna Cedeno and her business, RC Travel Agency.
According to DOJ, Cedeno and the business prepared returns that understated customers’ federal income-tax liabilities and inflated their refunds. The alleged methods included false Schedule C expenses and business losses, fraudulent education credits, improper child and dependent credits, and incorrect filing statuses.
The injunction bars Cedeno and RC Travel Agency from preparing tax returns, assisting others with returns, working for or holding an ownership interest in a tax-preparation business, and transferring customer lists to another person or entity.
The order also requires Cedeno to provide a copy of the injunction to customers for whom she prepared federal returns, as well as to the business’s employees, contractors, and vendors.
Michigan Preparer and Related Businesses Permanently Enjoined
On July 15, 2026, DOJ announced another permanent injunction, this time against Detroit-area preparer Ann Heibeck and several businesses operating under the Equitax name.
According to DOJ, Heibeck and the businesses prepared returns containing fictitious or inflated Schedule C expenses, dependent-care expenses, education expenses, and credits available under the Families First Coronavirus Response Act.
The court found that Heibeck prepared and filed thousands of false returns through one of the businesses, including returns submitted using her husband’s preparer identification number.
The injunction bars Heibeck and the related businesses from preparing returns, assisting others with returns, owning or working for a tax-preparation business, helping another person establish a preparation business, and transferring customer lists.
The order also requires copies of the injunction to be displayed wherever the defendants conduct business and requires a link to the injunction on the business’s website.
DOJ Seeks Injunction Against Florida Preparers Accused of Causing More Than $7 Million in Losses
On April 29, 2026, DOJ announced a civil lawsuit against Florida return preparers Cedric Reid and Juan Santana, as well as Reid’s business, Advance Tax Group Inc.
The complaint seeks to prohibit the defendants from preparing federal income-tax returns. Because this matter remains pending, DOJ’s claims have not been established by a final judgment.
According to the complaint, the defendants prepared returns containing false filing statuses, fabricated or inflated business expenses and losses, and improper fuel-tax, education, and other credits. DOJ also alleges that the defendants used false information to maximize customers’ earned income-tax credits and failed to comply with the IRS’s related due-diligence requirements.
The government estimates that the alleged conduct caused more than $7 million in tax losses during 2023 and 2024 alone.
Recurring Enforcement Themes
Although these six matters involve different defendants, allegations, and procedural stages, they reveal several recurring enforcement themes.
First, return preparers remain a central enforcement target—particularly when DOJ believes a preparer repeatedly used the same false credit, deduction, business loss, or filing status across numerous customer returns. A pattern repeated across many returns is easier for the government to characterize as systematic rather than accidental.
Second, refundable credits remain a significant area of exposure. The recent matters involve energy credits, COVID-related credits, education credits, fuel-tax credits, and the earned income-tax credit. Those provisions have been used to generate substantial refunds and, consequently, substantial alleged losses when replicated across hundreds or thousands of returns.
Third, events occurring after direct government contact can materially alter a case. Conduct following an IRS summons, interview, warning, or search warrant may become important evidence of knowledge and willfulness—and may sometimes be more damaging than the conduct that first attracted the government’s attention.
Finally, the line between civil and criminal tax enforcement is not defined merely by whether a return was incorrect. The central question in a criminal tax case is generally whether the government can prove that the person knew what the law required and intentionally violated that duty. Evidence of concealment, repeated falsification, obstruction, or continued conduct after notice may move a matter beyond an ordinary civil tax dispute.
Taxpayers, business owners, and return preparers facing an IRS examination, summons, search warrant, or investigation should therefore evaluate both the civil and criminal implications before responding. By the time DOJ files criminal charges or seeks an injunction, the government has usually been investigating the underlying conduct for a substantial period.
This article is for informational purposes only and does not constitute legal advice. The criminal charges discussed above are allegations, and each defendant is presumed innocent unless proven guilty beyond a reasonable doubt.
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Eddie R. Mendoza is a former federal prosecutor and former Trial Attorney with the U.S. Department of Justice Tax Division. He is the founder of Mendoza Defense PLLC, where he represents clients in white-collar investigations, federal criminal cases, and criminal and civil tax matters. He can be reached at eddie@mendozadefense.com.