FOR IMMEDIATE RELEASE|
THURSDAY, SEPTEMBER 25, 2003
TDD (202) 514-1888
JUDGE ORDERS OHIO ACCOUNTANT BARRED FROM PREPARING
FEDERAL TAX RETURNS AND REPRESENTING CLIENTS BEFORE THE IRS
WASHINGTON, D.C. - The Justice Department today announced that Judge Susan J. Dlott, of the U.S. District Court for the Southern District of Ohio, ordered that Ohio accountant Robert C. Welti be permanently barred from preparing federal tax returns and representing clients before the Internal Revenue Service.
The court found that Welti, a Certified Public Accountant (CPA), had substantially interfered with the proper administration and enforcement of the internal revenue laws. In addition to barring Welti from preparing federal income tax returns, the judge also ordered him to disclose the names of all persons for whom he prepared income tax returns since 1988.
“This injunction is a victory for the law-abiding American taxpayer,” said Claire Fallon, Deputy Assistant Attorney General for the Department of Justice’s Tax Division. “The Justice Department will move to shut down individuals who promote fraudulent tax schemes and scams. In addition, participants in such schemes may be subject to back taxes, penalties, and even criminal prosecution.”
According to the complaint, Welti allegedly prepared federal income tax returns that professed eliminating taxes for hundreds of clients based on sham trusts and bogus deductions. This alleged scam resulted in more than $3 million in total annual tax understatements.
The government submitted documents reflecting arguments Welti made at Internal Revenue Service audits of his clients. These included that the federal income tax is unconstitutional, the Internal Revenue Service is not authorized to collect taxes, and that only income earned in foreign countries, not income earned in the United States, is taxable. Among the documents the government submitted in support of its request to enjoin Welti were copies of tax returns he prepared for his clients, including one in which Welti allegedly used multi-layered trusts purporting to make payments to an offshore trust in Belize to underreport his client’s income by more than $3 million.
More information about the Justice Department’s Tax Division can be found at www.usdoj.gov/tax.