Federal Court Halts Tax Fraud Scam in Missouri | AccountingWEB

Federal Court Halts Tax Fraud Scam in Missouri

The Justice Department announced this weel that a federal court has barred Janis E. Greehey, of Branson, Missouri, from selling the “corporation sole” and “claim of right” tax schemes. The order, entered by Judge Richard E. Dorr of the U.S. District Court for the Western District of Missouri, also requires Greehey to provide the Justice Department with her customers’ names, addresses, and Social Security or taxpayer identification numbers, and to remove materials about the banned promotions from her websites.

According to court filings, Greehey falsely told customers they could exempt themselves from income tax if they transferred income and assets to a so-called corporation sole and claimed that it was a church. Under the claim of right scheme, Greehey allegedly falsely told customers that compensation for their labor is not subject to income tax, and they could therefore get refunds of past taxes paid.

“The IRS and Justice Department are working vigorously to stop the proliferation of tax fraud schemes,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “People who sell these scams enrich themselves at the expense of their customers and of the law-abiding Americans who pay taxes.”

Martin M. Shoemaker, a trial attorney with the Justice Department’s Tax Division, represented the United States in this case, which was filed after an investigation by the IRS’s Small Business/Self-Employed Division.

Court papers alleged that Greehey promoted the schemes with the help of Joseph O. Saladino, through an organization called the Freedom & Privacy Committee. Separate government suits against Saladino, who lives in Palmdale, California, and other alleged promoters have been filed in several courts around the country. A federal court in Los Angeles entered a permanent injunction against Saladino and the Freedom & Privacy Committee last month.

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