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Greensboro Woman Sells Phony "Corporation Sole" and "Claim of Right" Tax Programs


WASHINGTON, D.C. - The Justice Department announced today that a federal court has permanently barred Nancy E. Lloyd, of Greensboro, North Carolina, from selling two fraudulent tax schemes known as the “corporation sole” and “claim of right” programs. Judge N. Carlton Tilley, Jr. of the U.S. District Court for the Middle District of North Carolina entered the civil injunction order.

The court’s opinion states that Lloyd has made a number of false and fraudulent statements to her customers concerning the tax benefits of her corporation sole program. According to the opinion, Lloyd claims that a corporation sole is tax exempt even when it is used for a participant’s personal benefit. The opinion further states that she falsely advises customers that they can transfer their property to a corporation sole and then control and use the assets and the income from that property for their own personal benefit without paying tax on it. According to the opinion, Lloyd also has made false and fraudulent statements in connection with the claim of right program. She falsely claims that participants have a right to exclude compensation for personal services or labor from taxation. Finally, the opinion states that Lloyd knew or had reason to know that her statements concerning the tax consequences of the corporation sole and claim of right programs were false and fraudulent. The court’s order requires Lloyd to inform her customers of the civil injunction and provide them with a copy. The court also permanently barred Lloyd from representing persons before the Internal Revenue Service.

Lloyd promotes the schemes through a California-headquartered nonprofit corporation called the Freedom & Privacy Committee. The company was founded by Joseph Saladino. According to the court’s opinion, Freedom & Privacy Committee customers spread across the country in more than 40 states have submitted claims for frivolous tax refunds to the IRS in amounts exceeding $39.5 million. Separate government injunction suits against Saladino, who lives in Palmdale, California, and other alleged promoters have been filed in several courts around the country. A federal court in Los Angeles entered a permanent injunction against Saladino and the Freedom & Privacy Committee earlier this year.

Both the corporation sole and claim of right programs are listed in the IRS’s annual list of the “Dirty Dozen” tax scams at,,id=136337,00.html.

More information about the Justice Department’s efforts against tax-scam promoters can be found at Information about the Justice Department’s Tax Division can be found at

Related Documents:

  United States v.
  Nancy E. Lloyd, etc.

Judgment and Permanent Injunction Order

Memorandum Opinion

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

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