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US Government Wins Major Tax Shelter Case

by Leroy Baker, Tax-News.com, New York

29 December 2004


A federal jury on Monday convicted six people in a $120 million tax shelter scheme described by the authorities as one of the most extensive cases of its type ever tried.

The case involved the Washington state-based firm Anderson Ark and Associates, which charged around 1,500 clients fees ranging from $50,000 to $250,000 for tax shelter plans that helped them take income tax deductions in the period form 1997 to 2001.

The Associated Press reported that the schemes, which were sold over the internet, involved transactions using shell companies and loans connected to Costa Rican bank accounts to create the appearance that clients had legitimate tax-deductible business expenses.

Six defendants were convicted of a number of offences after the seven-week trial, including filing false tax returns, mail fraud, wire fraud, and money laundering.

Welcoming the verdict, which comes in the wake of a number of embarrassing defeats for the government in high profile tax shelter cases, IRS Commissioner Mark W. Everson noted that the case represents “a real blow to promoters of shady offshore tax schemes."

The authorities are considering re-filing charges against four defendants about whom the jury was unable to reach a verdict.


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