A 70-year-old man from Midvale, Utah, was recently charged with federal tax fraud crimes. A federal grand jury in Salt Lake City indicted the man along with a 73-year-old woman from Henderson, Nevada, for marketing a business plan that allegedly ran afoul of U.S. tax laws.
Tax is one of the most complicated areas of law, which is why many businesspeople are accused of tax-related white collar crimes. Taxes are a large part of any business and many business plans are designed to minimize the amount of taxes that a small business will have to pay. While it is not illegal to minimize one’s tax burden, certain business plans and products are considered to be tax fraud schemes and can land their participants in jail.
In this case, federal authorities allege that the Utah man and the Nevada woman committed tax fraud by marketing so-called “corporations sole.” The couple allegedly told their clients that corporations sole were exempt from U.S. income tax laws and had no obligations to file tax returns.
“They further claimed that individuals could render their own income non-taxable by assigning it to the corporation sole, could draw a tax-free stipend from their corporation sole, and could render property immune from Internal Revenue Service (IRS) collection activity by transferring property to the corporation sole,” the federal indictment alleges.
Authorities allege that the couple made at least 90 corporations sole that shielded about $5,000,000 from taxation. If convicted, the couple could face at least five years in prison fines of $250,000.
Source: Utah DOJ, “UTAH MAN AND NEVADA WOMAN CHARGED WITH TAX CONSPIRACY,” Jan. 23, 2013