Many
Unhappy Returns

Atlanta- Georgia taxpayers are beginning to repay what they owe the state after a Channel 2 Action News - Atlanta Journal Constitution investigation exposed a local elected official who inflated thousands of tax returns.

It's the largest case of its kind in state history; Georgia could recover more than $6 million.

"Those taxes are rightfully owed to the state," said Georgia Department of Revenue Commissioner Lynne Riley, "So anyone who isn't paying their fair share is compromising everybody else."

Taxpayer after taxpayer told investigative reporter Jodie Fleischer they thought they could trust Ruth Barr.
After all, she didn't just run a Hapeville tax business, she was also an elected official serving on the city council.

But earlier this year, Channel 2 and the AJC revealed a trail of unhappy customers stuck with IRS audits and bogus tax returns.

"Obviously they're upset, they feel like they were duped," said Department of Revenue Chief Investigator Josh Waites, "It doesn't matter who's doing your taxes, you need to look."

Georgia Department of Revenue investigators immediately opened a criminal investigation, raiding Barr's tax business, and alleging she inflated the value of her clients' refunds.

Now the state is sending Barr's clients letters asking for that money back, plus they have to pay what they would have owed had their taxes been done properly.

"It's disappointing when any taxpayer is compromised," said Riley, "And if there is information on a return that a taxpayer can substantiate, then we're providing them that opportunity to do so."

The first 100 letters were sent to the taxpayers who appear to owe the state the most money: approximately $872,000. Investigators say in all there are nearly 8000 suspicious tax returns filed through Barr's office during tax years 2013, 2014 and 2015, for an estimated $6.4 million.

"It's a big case for us considering that's one preparer in South Fulton County," said Waites, "It just kind of shows you the kind of damage one preparer can do."

"It's important that taxpayers know what is on a return that they sign," added Riley, "They're responsible ultimately for the accuracy and the validity of that information."

If there are discrepancies in the return, the taxpayer is responsible.

Ruth Barr is already facing one criminal charge for an alleged investment scheme involving a family member in Gwinnett County, and a civil fraud judgement for another scheme involving a former tax client in Fulton County.

State investigators say that is just the beginning of Barr's legal trouble.
"We anticipate several felonies indicted in Fulton County in the next couple of months," said Waites.

After our initial reports, we heard from more than 100 of Barr's former tax clients, several of whom have been contacted by the IRS after problems with their returns.

A significant number of the clients work in public safety as first responders. Barr claimed to specialize in deductions for firefighters, paramedics and police.

Barr has repeatedly denied any wrongdoing.

“They came and took all of her paperwork and computers 8 months ago and have yet to arrest or indict her on any formal charges," said Barr's attorney Steve Adkins. "Basically, they’re keeping her from being able to operate her business or being able to work on defending herself.”

Barr rebuffed her fellow Hapeville councilmembers' efforts to get her to resign.
Georgia's Department of Revenue has already blocked Barr and any of her employees from submitting tax returns next year.

In the midst of our investigation, the owner of a small printing shop in Hapeville filed a police report against Barr, after she paid an outstanding bill with a bad check. Police officers in the very city Barr serves as a councilwoman said they repeatedly failed to reach her to ask about the incident. They took the case to a judge and swore out a warrant for Barr's arrest. But records show when they went to serve that warrant, Barr was able to talk her way out of the arrest, instead calling the victim and promising to repay the money immediately.

The victim told Channel 2 he received the payment in cash later that day, and signed an agreement not to prosecute Barr and supporting dismissal of the arrest warrant.

The city launched an internal investigation after Channel 2 asked about the situation, and issued a report saying no city policies were violated.

Our investigation also revealed that Georgia does not require any training or have any oversight of the state's tax preparers, making it even more important to check out the credentials of the person you're hiring.

"It's vital that taxpayers know who they're working with," said Riley, "They need to be sure that whoever it is they're entrusting with their financial and identity information, they need to know they can have full confidence in the integrity of that individual."