The federal government alleges Edmonds created fake businesses for her clients and claimed phony expenses for them on tax returns. She is also accused of improperly claiming the earned income tax credit for some customers. Edmond's actions are alleged to have cost the government more than $9.7 million
In one case, the complaint alleges The Tax Factory prepared two returns for a customer which claimed bogus business losses of approximately $30,000 for each of two years, resulting in an improper refund of about $7,000 in each year.