Department of Justice Seal Department of Justice
FRIDAY, JUNE 23, 2006
(202) 514-2007
TDD (202) 514-1888

Federal Court Bars Florida Man from Promoting Frivolous "861" Argument

Preparer Claimed Income Earned
by Individuals in the United States is Not Taxable

WASHINGTON – The Justice Department announced today that Judge Elizabeth Kovachevich of the U.S. District Court for the Middle District of Florida has entered an injunction order that permanently bars Douglas Rosile, a former certified public accountant, and anyone working for him, from preparing federal income tax returns for others and from promoting a frivolous tax argument based on Section 861 of the Internal Revenue Code

This “861” argument falsely claims that individual U.S. residents are exempt from federal income tax unless they earn income in a foreign country. To the contrary, federal income tax is imposed on the domestic and foreign income of U.S. residents. According to court documents filed by the government in the case, Rosile prepared returns based on the 861 argument for customers in 34 states and caused an estimated loss to the United States of at least $29 million.

The court also ordered Rosile to give the Justice Department a list of his customers’ names, addresses, e-mail addresses, and Social Security numbers.

More information about this case is available on the following Justice Department website at

The Justice Department has sought and obtained injunctions against more than 180 federal tax return preparers and promoters. Information about these cases is available on the Justice Department website at More information about the Justice Department’s Tax Division can be found at The IRS recently listed return-preparer fraud as one of the 2006 “Dirty Dozen” tax scams. The “Dirty Dozen” list can be found at,,id=154293,00.html.