IRS says it lost millions from the bogus credits a tax preparer is accused of filing

By filing thousands of tax returns replete with bogus energy, education and low-emission vehicle credits, the Internal Revenue Service estimates a Key Largo accountant bilked the federal government out of millions of dollars in tax revenue, according to court documents.

The Department of Justice Friday filed a civil complaint against Thriving in the Black, LLC, and its owner, Roger Gerardo Brenes, whose office is located in Key Largo.

The complaint, which seeks to stop Brenes from conducting business as a tax preparer, states that between 2013 and 2018, he “repeatedly fabricated” education, energy and vehicle expenses to increase the amount of money his clients would receive from the IRS.

“Given the IRS’s limited resources, identifying and recovering all revenues lost from defendants’ fraudulent activities may be impossible,” the complaint states.

Not only did the IRS lose out on tax revenue, many of Brenes’ clients, most of whom the complaint says did not know they filed false credits, now owe money to the government, according to the complaint.

“Many of the customers were audited by the IRS and now face income tax debts that may include penalties and interest,” Pascale Guerrier, a Justice Department trial attorney, wrote.

Reached for comment Friday afternoon, Brenes first said he closed Thriving in the Black five years ago and said someone could have stolen his identity.

“This has nothing to do with me,” he said, Then he said the Miami Herald had called the wrong number and denied his name was Roger Brenes, although that’s how he originally identified himself.

According to Florida Division of Corporations records, Brenes registered Thriving in the Black as a domestic for-profit company based in South Miami in 2011, and filed annual reports in 2012 and 2013. He reinstated the company to active status on Oct. 25, 2018, with his office listed in Key Largo.

“About 20 percent of Thriving in the Black’s customers are low income individuals,” Guerrier wrote.

According to the complaint, Brenes and his staff prepared and filed with the IRS 3,919 tax returns from 2013 to 2019, most of which were done in 2014, 2015 and 2016. The complaint also states Brenes falsely identifies himself on company letterhead as a certified public accountant.

If Brenes did what the complaint accuses him of, his motive is not clear from available court documents, which state only that his clients unknowingly benefited from the inflated refunds.

Many of the false education credits the IRS says Brenes filed were for expenses “purportedly incurred at beauty schools,” according to the complaint.

The clients’ returns stated they attended the Beauty Schools of America on Miami Beach. However, Guerrier said they never attended the institution.

Brenes, according to the complaint, submitted credit card receipts to the IRS for students he stated attended the school in 2011 and 2012.

“Many of the receipts were identical for each customer, including amounts, dates, time and transaction numbers,” Guerrier wrote. “The finance director at Beauty Schools of America had no record of enrollment for the students for whom the defendant claimed the education credits.”

One of several examples Guerrier provided in the complaint about fake energy credits was one where he says Brenes claimed a client spent more than $20,000 on a solar energy system for his home in 2015. The client received an energy credit of $6,167, according to the complaint.

To qualify for the credits, a homeowner must spend money on solar, small wind energy, geothermal or fuel cells for his or her principal residence. The client in question bought a conventional air conditioning unit that not only would not qualify for a credit, but cost less than the amount the IRS refunded.

“The customer did not request that Brenes claim the credit on the return,” Guerrier wrote.

The IRS also accuses Brenes of falsifying returns to state his clients purchased low-emission or alternative fuel cars, which are eligible for credits of up to $7,500.

“The defendants falsely claim the motor vehicle credits for customers whose vehicles do not qualify,” the complaint states. “The motor vehicle credits the defendants falsely claim on customers’ returns directly reduce the customers’ tax liability by the amount of credits resulting in inflated or generated refunds.”