Federal Court Bars Three From Promoting 'Sham Trust' Tax Scam

The Justice Department announced last week that a federal court in Florida has permanently barred Fred J. Anderson and Deborah A. Martin, of Lehigh Acres, Florida; and Richard A. Walters, of Arlington, Texas, from promoting sham trust tax schemes or any other tax fraud scheme.

The court also barred Martin, a tax return preparer, from preparing returns for customers that assert unrealistic positions. The court in January barred Tax Strategies, Inc., a company the three defendants ran, from promoting sham trust or other tax fraud schemes.

The court also barred the individuals from selling any type of asset-protection device—including trusts, limited

Got a Good Book Recommendation?
Have you read a great book that has helped
you in your professional life lately?

If so, let us know so we can share
your suggestion with others.

E-mail us your suggestion!

 

 

liability companies or corporations, private foundations, or similar arrangements—that advocates or facilitates tax evasion or noncompliance with income tax laws.

According to court filings, the defendants helped customers establish sham charitable foundations, trusts, and corporations that customers used illegally to eliminate or reduce their reported federal tax liabilities by claiming improper deductions. Court papers identified improper deductions claimed for non-deductible personal items such as groceries, residential landscaping and cable television bills, pet expenses, and a hammock and flag pole at a customer’s house. The government alleged that the defendants’ conduct cost the federal Treasury more than $7.5 million.

“People who claim that trusts, foundations, or other entities can transform personal expenses into tax deductions are leading you down a path to serious trouble,” said Eileen J. O’Connor, Assistant Attorney General for the Department of Justice’s Tax Division. “Stopping the promotion and use of such scams is a high priority for the Tax Division of the Justice Department.”

Evan J. Davis and LaQuita Taylor-Phillips, trial attorneys with the Justice Department’s Tax Division, represented the government in this case, which George Ventura and Arthur Brake, of the IRS’s Small Business/Self-Employed Division, investigated.

You may like these other stories...

A version of this article originally appeared at Practice Development Counsel. Many professions and industries struggle with inter-generational challenges. The advertising industry is just one of those industries...
By Phyllis Weiss Haserot, President, Practice Development Counsel This post originally appeared at Practice Development Counsel. Reflection is something I do a lot of – I have for many years quite...
By Jeff Davidson Whether you work for a large organization, a small accounting firm, or are self-employed, within the course of the workweek you'll undoubtedly encounter a variety of irritations, frustrations, and...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.