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obtain exempt status for his clients from the Internal Revenue
Service. In some cases, petitioner did not submit the required
filings. For each exempt organization he purportedly established,
petitioner received a fee of approximately $3,000. Records
maintained by the State of Nevada indicate that petitioner
attempted to establish at least 98 exempt organizations during
the taxable year 1993.
Petitioner encouraged clients to name persons as officers
and members of the exempt organizations' board of directors whom
his clients could trust to act in name only. Petitioner
emphasized that these individuals should be willing to resign at
his clients' desire and that a power of attorney from such
persons to his clients to vote on their behalf was encouraged.
On several occasions, petitioner offered to act or acted as an
officer or member of the board of such organizations. Petitioner
also maintained a list of doctors, lawyers, and others who could
be trusted to act as officers and board members in name only.
Petitioner warned his clients not to send up "flags" for the
Internal Revenue Service. On one occasion, petitioner described
the client's exempt organizations as a "license to steal". In
several instances, petitioner did not fulfill the promises he
made to his clients.
On their 1993 Federal income tax return, petitioner and his
wife filed a Schedule C which listed a business named "All
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