WASHINGTON – The United States announced that it has sued to block Robert L. Schulz, of Queensbury, N.Y., from selling an alleged tax fraud scheme said to have cost the U.S. Treasury more than $21 million, the Justice Department announced today. Also named in the suit are two corporations, We the People Foundation for Constitutional Education Inc., and We the People Congress Inc.
The government’s complaint, filed in Syracuse with the U.S. District Court for the Northern District of New York, alleges that Schulz has used the two We the People entities to market a nationwide tax fraud scheme, called the Tax Termination Package, to employers and employees. According to the complaint, the Tax Termination Package includes We the People forms, which the defendants falsely tell customers can be used to replace forms the IRS requires employers and employees must use in connection with federal tax withholding from wages.
The suit says that Schulz and the We the People entities falsely state that use of the replacement forms will allow customers to legally stop tax withholding. According to the complaint, the defendants base the scheme on frivolous arguments about federal tax laws that federal courts have repeatedly rejected. These schemes are on the IRS’s 2007 list of the Dirty Dozen tax scams. http://www.irs.gov/newsroom/article/0,,id=167983,00.html
“People who sell tax scams are asking for trouble for themselves and their customers who participate in them,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “They and their customers temporarily enrich themselves at the expense of law-abiding taxpayers. The Justice Department and the Internal Revenue Service are determined to stamp out these scams.”
Since 2001 the Justice Department has obtained more than 230 injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. More information about the Justice Department’s efforts against tax-scam promoters can be found at http://www.usdoj.gov/tax/taxpress20076.htm. Information about the Justice Department’s Tax Division can be found at http://www.usdoj.gov/tax.