FEDERAL COURT PERMANENTLY BARS WASHINGTON STATE TAX-SCAM PROMOTER

Sham Trusts, False Claims of Tax-Exempt Status Used to Hide Income and Assets

WASHINGTON, D.C. - The Justice Department announced today that a federal court has permanently barred Raymond Leo Bell of Yelm, Washington, from promoting two tax-fraud schemes. In entering the permanent injunction order, Judge Robert J. Bryan of the U.S. District Court for the Western District of Washington also barred Bell’s two businesses, American Beauty Rose and Best Way, Inc., from selling the same schemes. The court also directed the defendants to notify their customers of the injunction and to give the Justice Department their customers’ names, mailing and e-mail addresses, Social Security and telephone numbers.

The court found that the defendants’ first scheme used sham trusts and unincorporated business organizations as a means of attempting to conceal income from the IRS. In a second scheme, the defendants helped customers falsely claim tax-exempt status for their businesses and assisted customers in fabricating and inflating deductions in a fraudulent attempt to evade income and employment taxes. The court prohibited the defendants from selling any type of plan or arrangement that advocates or facilitates tax evasion or noncompliance with the tax laws.

“People who buy into tax-fraud schemes are sending good money after bad prospects: past due tax bills with interest and penalties, along with the possibility of criminal prosecution,” said Eileen J. O’Connor, Assistant Attorney General for the Tax Division. “The Justice Department and the IRS are committed to stopping the promotion of tax fraud.”

Misuse of trusts tops the IRS’s list of “Dirty Dozen” tax schemes, the full list of which is available at: http://www.irs.gov/newsroom/article/0,,id=136337,00.html. More information about this case is available at: http://www.usdoj.gov/tax/txdv04681.htm and http://www.usdoj.gov/tax/txdv05068.htm. More information about the Justice Department’s efforts against tax-scam promoters can be found at: http://www.usdoj.gov/tax/taxpress2005.htm. Information about the Justice Department’s Tax Division can be found at: http://www.usdoj.gov/tax.