Alleged improper use of legal tool yields tax conspiracy charges

It is probably fair to say that for as long as there have been tax laws, there have been means and methods sought and developed to try to mitigate the liability they impose. As Washington, D.C., readers of this blog likely know, there are ways to go about protecting oneself. There are also illegal ways, which may result in tax crime charges.

But just as with any criminal charge, anyone accused of a tax crime is presumed innocent of the allegation unless and until they are proven guilty beyond a reasonable doubt. That fact seems often to be overlooked by the media when reporting on such stories, even when prosecutors go out of their way to stress the point in announcing actions they are taking.

The point is important to remember in one case that recently resulted in a federal grand jury indictment in Utah. The indictment names a 70-year-old Utah man and a 73-year-old Nevada woman. It was handed down late last month.

According to the federal prosecutors, the pair is accused a single count of conspiracy to defraud the government. The allegation is that they did this by promoting a service under which they set up so-called corporations sole for clients. The government says the couple falsely told individuals that the legal structure would leave them free from obeying tax laws, or even from having to file federal income tax returns.

The indictment says the man and woman created some 90 such corporate entities between one three-year time span. It also says that those who used the process sought to avoid tax bills amounting to more than $5 million.

The case is still being investigated by the Internal Revenue Service, but the fact that an indictment has been obtained from a grand jury suggests that elements of a case are coming together and it is time to be consulting with an attorney.

Source:, "Utah Man and Nevada Woman Charged with Tax Conspiracy," Terri Eyden, Jan. 24, 2013

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