FOR IMMEDIATE RELEASE |
MONDAY, OCTOBER 18, 2004
TDD (202) 514-1888
COURT HALTS COLORADO COUPLES TAX SCHEME
Promoters Must Give Customers Names and Addresses to Justice Department
WASHINGTON, D.C. - The Justice Department announced today that a federal court has barred Charlene G. Chapin and her husband, Thomas S. Chapin, both of Denver, Colorado, from selling two tax schemes known as the corporation sole and claim of right programs. The order was entered by Judge Walker D. Miller of the U.S. District Court for the District of Colorado, in Denver.
According to papers filed in the case, the Chapins falsely advised prospective customers that the corporation sole program could exempt them from income taxation if they transferred their income and assets to a so-called corporation sole and claimed that it was a church. In the claim of right program, the Chapins allegedly falsely told customers that compensation for their labor is not taxable, and they could therefore get refunds of past taxes paid.
Court papers also alleged that the Chapins worked with Joseph O. Saladino, through an organization called the Freedom & Privacy Committee, in promoting the schemes. Separate government suits against Saladino, who lives in Palmdale, California, and other alleged promoters are pending in several courts around the country.
The courts order requires the Chapins to give the Justice Department the names and addresses of all persons to whom they sold their programs. Additionally, the Chapins must remove materials about the banned promotions from their websites and must notify their customers of the injunction.
Promoting or participating in fraudulent tax scams is illegal, said Eileen J. OConnor, Assistant Attorney General for the Justice Departments Tax Division. The Justice Department and IRS are working tirelessly to shut down fraudulent tax schemes.
OConnor thanked Martin Shoemaker, the Tax Division trial attorney who handled the case, and the agents of IRSs Small Business/Self-Employed Division who investigated it.
The Justice Department has sought and obtained injunctions against a number of tax-scam promoters. Information about these cases is available on the Justice Department website at http://www.usdoj.gov/tax/taxpress2004.htm.
The corporation sole and claim of right programs are included in the Internal Revenue Services list of the Dirty Dozen tax scams, available at http://www.irs.gov/newsroom/article/0,,id=120803,00.html. Information about the Justice Departments Tax Division can be found at http://www.usdoj.gov/tax.