Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
MONDAY, JANUARY 30, 2012
WWW.USDOJ.GOV
TAX
(202) 514-2007
TDD (202) 514-1888

FEDERAL COURT BARS NEVADA MAN FROM PROMOTING TAX FRAUD SCHEME

California Court Says Promoter’s Theories About Taxing Authority Are Wrong

WASHINGTON – A federal court has permanently barred David Champion from promoting a tax fraud scheme designed to assist his customers evade federal taxes, the Justice Department announced today. The civil injunction order was signed by Judge Percy Anderson of the U.S. District Court for the Central District of California.

The court determined that Champion promotes a tax fraud scheme based on the frivolous claim that U.S. citizens can choose to opt out of federal income taxation by declaring themselves to be “non-taxpayers.” The court found that Champion promotes the scheme through websites, a radio program and a self-published work entitled Income Tax: Shattering the Myths. According to the government complaint, Champion, who currently resides in Nevada, repeatedly helped his customers evade taxes by establishing sham “pure trusts” to which they transferred their business and personal assets, and he falsely informed his customers that their purported trusts did not need to file income tax returns or pay taxes.

In granting the permanent injunction, Judge Anderson held that Champion’s theories concerning the government’s taxing authority are wrong. Among other things, the injunction order bars Champion from instructing people that they may become “non-taxpayers,” from offering his services to assist others in taking advantage of this false status, and from forming trusts for others.

The government alleged that Champion’s misconduct led to civil and criminal penalties against his customers. The complaint states that Internal Revenue Service (IRS) inquiries into eight of Champion’s customers revealed that he had assisted them in evading payment of approximately $1.4 million in income taxes.

In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax-fraud promoters and unscrupulous tax-return preparers. Information about these cases is available on the Justice Department website.

Related Documents:

  United States v. David Champion
Complaint for Permanent Injunction and Other Relief

Judgment and Permanent Injunction

Opinion

(PDF document)


Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader


Accessibility Information

 

 

 

 

###

12-133