A federal court has barred a man and his two companies from preparing tax returns.
Tobias Elsass runs Fraud Recovery Group, Inc. and Sensible Tax Services, Inc.
The companies offer tax preparation services, with much of their business dealing with elderly customers.
The district court found that Elsass and his companies promoted a scheme that preyed on investors who had suffered financial losses.
The companies told their investors that they could deduct their financial losses on their federal returns in a way to receive large refunds.
Tax law indicates that only victims of fraudulent schemes can deduct their losses as thefts, and they must substantiate their losses.
The court says Elsass knew that the IRS disallowed such claims, and he engaged in "incompetent or disreputable" behavior not becoming a tax professional.
The companies were ordered closed, and the judge said Elsass cannot engage in any business relating to tax advice or preparation.