Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
WEDNESDAY, APRIL 30, 2003
WWW.USDOJ.GOV
TAX
(202) 514-2007
TDD (202) 514-1888

ST. PETERSBURG, FLORIDA, MAN ORDERED TO HALT TAX SCAM

Federal Court Enjoins Promoter of Frivolous "U.S. Sources" Tax Scheme


WASHINGTON, D.C. A federal court in Tampa yesterday permanently barred Everte Farnell from preparing federal income tax returns and promoting an unlawful tax scheme known as the "U.S. Sources" or "Section 861 argument," named after the tax code provision it misinterprets. Farnell consented to the order.

In an earlier order entered in the case, the court found that Farnell promoted the scheme on behalf of an organization known as the National Institute of Taxation Education (also known as "N.I.T.E."). Farnell and other N.I.T.E. associates have claimed that U.S. citizens who live and work in the United States are not subject to the federal income tax.

"The Section 861 argument is a scam," said Eileen J. O'Connor, Assistant Attorney General in charge of the Justice Department's Tax Division. "People should avoid illegal schemes like this, which can only get them in trouble."

Yesterday's order is the eighth obtained by the Justice Department against promoters of the "Section 861 scheme." In January, a federal court in Harrisburg, Pennsylvania ordered N.I.T.E. founder Thurston Bell to stop promoting the scheme. Federal courts have previously entered similar orders against Harold Hearn of Atlanta; David Bosset of Spring Hill, Florida; Douglas Rosile of Venice, Florida; Carel A. "Chad" Prater and his associate, Richard W. Cantwell, both of Sarasota, Florida; and Richard Haraka of Clifton, New Jersey. More information on these and other similar actions can be found at: http://www.usdoj.gov/tax/taxpress2003.htm.



# # #

Related Documents:

United States v.
Everte Farnell