Two former partners in a national CPA firm are under investigation for a tax-shelter operation using phony businesses. The greatest part of this article is that one earned the nickname ‘Dr. Poof’ because of his ability to make taxes go ‘Poof!’ Here is the report:
Two area tax advisers used sham companies and nonexistent chicken farms to shelter their clients’ income from hundreds of millions in taxes, government lawyers alleged Thursday.
In separate but related civil suits filed in federal court, the IRS said that Allen R. Davison of Overland Park and A. Blair Stover Jr. of Platte City and Beverly Hills, Calif., sold numerous fraudulent tax-avoidance schemes to wealthy investors. The agency’s lawyers asked a federal judge in Kansas City to permanently bar the men from giving tax advice or representing clients before the IRS.
The complaint cited a press account as stating that Davison’s clients and colleagues referred to him as “Dr. Poof” because of his reputation for making taxes go away.
Both complaints alleged the men helped wealthy clients evade income taxes through elaborate fraud schemes using bogus corporations and Roth individual retirement accounts.
“The amount of tax loss caused by Davison’s promotions is incalculable but likely in the hundreds of millions of dollars,” the complaint against Davison stated.
Neither Davison nor Stover could be reached for comment Thursday. But Stover’s attorney, Mark Thornhill, called the allegations “plain wrong” and said they “appeared to come from a disgruntled former business partner.”
“Moreover,” he said, “these allegations relate to transactions that occurred years ago. We are perplexed.”
So it’s perplexing when the government comes after you for bilking them out of ‘hundreds of thousands of dollars’ if it happened years ago. My favorite part of this is later in the article when it is revealed who the ‘disgruntled former business partner’ is:
Disgruntled former clients facing tax audits also filed suit in Nebraska and California, alleging in one case that they likely owed “millions of dollars” in back taxes and penalties.
Clients who adopt tax avoidance strategies that the IRS later finds improper must pay the taxes owed and penalties, even though they were taking someone else’s advice.
What a great way of looking at things! A tax professional peddles fraudulent tax schemes that fall apart leaving the client on the hook for unpaid taxes, penalties and interest, but that testimony should be discounted because the clients are just ‘disgruntled former partners’!
We also learn that the nickname ‘Dr Poof’ may be unwarranted as client V. Cheryl Womack explains:
“It made a lot of sense for me to have somebody here. And I paid plenty of friggin’ taxes. I never got mine ‘poofed’ away.”
A classy lady indeed!
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