Court Halts Colorado Couple's Tax Scheme, Arrests California Promoter
According to papers filed in the case, the Chapins falsely advised prospective customers that the corporation sole program could exempt them from income taxation if they transferred their income and assets to a so-called corporation sole and claimed that it was a church. In the claim of right program, the Chapins allegedly falsely told customers that compensation for their labor is not taxable, and they could therefore get refunds of past taxes paid.
Court papers also alleged that the Chapins worked with Joseph O. Saladino, through an organization called the Freedom & Privacy Committee, in promoting the schemes. Separate government suits against Saladino, who lives in Palmdale, California, and other alleged promoters are pending in several courts around the country.
The court’s order requires the Chapins to give the Justice Department the names and addresses of all persons to whom they sold their programs. Additionally, the Chapins must remove materials about the banned promotions from their websites and must notify their customers of the injunction.
"Promoting or participating in fraudulent tax scams is illegal," said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. v"The Justice Department and IRS are working tirelessly to shut down fraudulent tax schemes."
O’Connor thanked Martin Shoemaker, the Tax Division trial attorney who handled the case, and the agents of IRS’s Small Business/Self-Employed Division who investigated it.
In a related topic, the Justice Department announced that U.S. Marshals arrested James A. Mattatall of Harbor City, California last Friday.
The action resulted from a federal judge’s order last August finding Mattatall in contempt of court for failing to obey a court order entered last April. The April order, a permanent injunction, required Mattatall to give the Justice Department a list of the names, addresses, phone numbers, and Social Security numbers of his customers. The August order stated that if Mattatall did not provide his customer list within 24 days he would be incarcerated until he turned it over.
Mattatall is scheduled to appear today before U.S. District Judge Dean D. Pregerson.
"Tax scam promoters who disobey court orders to halt their illegal activities and turn over their customer lists risk serious consequences" said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division.