WASHINGTON, D.C. - The Justice Department today filed a civil injunction suit seeking to bar Daniel Doyle Benham of Twin Lake, Michigan, from marketing alleged tax-fraud schemes. The complaint, filed in the U.S. District Court for the Western District of Michigan in Grand Rapids, alleges that Benham, conducting business as R.O.C. Group International, falsely advises prospective customers that they can use so-called “corporation sole” and “strategic withdrawal” schemes to remove themselves from the federal tax system and avoid paying federal income taxes. The complaint also seeks an order directing Benham to provide the government with a list of his customers’ names, mailing and e-mail addresses, and telephone and Social Security numbers.
According to the complaint, at least 50 persons have each paid Benham—through a website—amounts ranging from $200 to $5,000 to participate in his tax-fraud schemes. Benham allegedly advises customers to file for bankruptcy and to revoke their drivers’ licenses and prior tax returns, falsely claiming that these actions will help customers remove themselves from the federal tax system. Benham, the complaint alleges, falsely tells his customers they can conceal their income and assets in a “corporation sole.” The suit asks the court to bar Benham from continuing the programs, which the suit says have cost the U.S. Treasury an estimated $2 million in lost tax revenue.
“Honest taxpayers can be assured that the IRS and Justice Department are taking action to halt the promotion of tax fraud,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division.
“The IRS and the Tax Division are diligently working together to address fraudulent tax promotions,” said Kevin M. Brown, Commissioner of the IRS Small Business/Self-Employed Division. “I encourage the public to bring questionable promotions and abusive preparers to our attention. We give serious attention to every referral we receive.”
“Corporations sole” are one of the IRS’s Dirty Dozen tax scams. They are listed at http://www.irs.gov/newsroom/article/0,,id=136337,00.html.
More information about the Justice Department’s efforts against tax-scam promoters can be found at http://www.usdoj.gov/tax/taxpress2006.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.