FOR IMMEDIATE RELEASE TAX

TUESDAY, MARCH 20, 2007 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

Federal Court Bars Michigan Man

from Preparing
Tax Returns for Others
Prepared Returns Based on False Theory That
Wages Are Not Income for Federal Tax Purposes for
Non-Government Employees
WASHINGTON - A federal court in Grand Rapids, Mich., has issued a temporary
restraining order barring Donald A. Gray from preparing federal income tax returns
for others, the Justice Department announced today. The order was entered after a
hearing before Chief Judge Robert Holmes Bell of the U.S. District Court for the
Western District of Michigan. The government is seeking to permanently bar Gray
from preparing returns.

The court found that the Portage, Mich., man has been preparing income tax returns
for customers based on the frivolous theory that wages are not income for federal
tax purposes unless the wage earner works for the government. The court found that
in preparing the returns Gray followed a scheme promoted by Peter Eric
Hendrickson of Commerce Township, Mich. Hendrickson describes the frivolous
theory in a self-published book entitled “Cracking the Code, The Fascinating Truth
About Taxation in America.”

The court also found that Gray misrepresented his qualifications, falsely claiming to
be a Certified Public Account (CPA) even though he is no longer licensed as a CPA
in Michigan. The government separately sued Hendrickson and several of his
followers last year to recover erroneous refunds they allegedly received after filing
tax forms and returns similar to Gray’s. In that case a federal judge in Detroit
recently ordered Hendrickson and his wife to repay an erroneous tax refund they
received after filing a tax return falsely claiming that Hendrickson’s wages from his
employer were not taxable income.

More about this case can be found at http://www.usdoj.gov/tax/txdv07024.htm.

Since 2001, the Justice Department’s Tax Division has obtained 230 injunctions to
stop the promotion of tax fraud schemes and the preparation of fraudulent returns.

Additional information about the Justice Department’s efforts to stop tax scams can
be located at http://www.usdoj.gov/tax/taxpress2007.htm. Information about the
Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.

###

07-167