Thursday, December 15, 2005

Justice Department Seeks to Stop Alleged Washington State Tax Scam

WASHINGTON, Dec. 15 /U.S. Newswire/ -- The Justice
Department announced today that it has filed a lawsuit
asking a federal court to bar a Gig Harbor, Washington
woman from marketing an alleged tax-fraud scheme. The
complaint in the civil injunction case-filed in the
U.S. District Court for the Western District of
Washington-alleges that Rita I. Johnson, conducting
business as Estate Preservation Association, falsely
advises customers that they can use a so-called
"corporation sole" to avoid paying federal income

According to the government's complaint, more than 100
persons have purchased or participated in Johnson's
corporation sole program, each paying Johnson between
$2,500 and $3,500. The suit asks the court to bar
Johnson from continuing the promotion and to provide
the Justice Department with a list of all her
customers' names, mailing and e-mail addresses,
telephone numbers, and Social Security numbers. The
complaint states that some states authorize
corporations sole as a means of enabling religious
leaders to hold property and conduct business, but
that tax benefits are available to a corporation sole,
or to any other organization, only if it qualifies as
a religious or charitable organization under the
Internal Revenue Code.

"People who promote tax evasion harm us all," said
Eileen J. O'Connor, Assistant Attorney General for the
Justice Department's Tax Division. "Not only do they
shift the tax burden onto the shoulders of law-abiding
taxpayers, but they also diminish public confidence in
the Nation's tax system."

Corporation sole scams are listed in the IRS's annual
list of the "Dirty Dozen" tax scams,,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


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