Texas’ unofficial motto has always been go big or go home. Or, in the case of one former tax professional, go out of business.
The U.S. District Court for the Northern District of Texas on Nov. 1 entered permanent injunctions against Charles Dombek and The Optimal Financial Group LLC barring both from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses, or assisting in the creation of “captive” insurance companies.
The injunctions also prohibit Dombek from preparing any federal tax returns for anyone other than himself and Optimal from preparing certain federal tax returns reflecting such tax plans, according to the U.S. Department of Justice.
Dombek and Optimal consented to entry of the injunctions.
Sham management companies: According to the government’s complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a tax scheme throughout the United States to illegally reduce customers’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or claim personal expenses as bogus business deductions.
As alleged by the government, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed tax returns for their customers reflecting the sham transactions, expenses, and deductions.
The government contended that the total harm to the treasury from the scheme could have been $10 million or more.
Recurring scams on IRS alert list: Questionable tax saving schemes are a perennial member of the Internal Revenue Service Dirty Dozen list. In the most recent tax scam list, the IRS warned of phony tax avoidance schemes involving syndicated conservation easements and micro-captive insurance arrangements.
Regardless of the tax scheme being peddled, the crooks’ goal is to take your money and personal information. And the IRS’ advice for every tax trick is the same. Beware of promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether.
Extended tax scheme list: The Justice Department’s Tax Division and the IRS have worked together to obtain injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters over the past decade.
You can digitally peruse an alphabetical listing of persons that federal tax and law enforcement officials have legally stopped from preparing returns and promoting tax schemes. If you believe that one of the enjoined persons or businesses may be violating an injunction, contact the Department of Justice Tax Division by emailing the details to TAX.MAIL@USDOJ.gov.
Tax Felon Friday: Here’s hoping you never fall prey to a bogus tax scheme. You can find warnings about the latest tax scams at IRS.gov’s page on how to recognize them. I’ll also report current warnings on the ol’ blog.
In the meantime, if you want to catch up on all sorts of tax miscreants, from suspects still operating to those who’ve been caught, the ol' blogs' special Tax Felon Friday page is a good place to start.
And if you want more tax crime posts, notably those that were published long before I gave them a special end-of-week feature, you can peruse, what else, the tax crimes category. You'll find this post at the top of that collection right now, so just scroll down for more.
You also might find these items of interest:
- Bad tax shelter advice (and more) leads to Florida man's federal indictment
- Offer in Compromise tax debt deals are real, but beware aggressive OIC promoters
- Georgia accountants get prison time for roles in $1.3 billion conservation easement scheme
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