Kent Ellsworth, an Arizona tax preparer, pleaded guilty to two counts of assisting in the preparation of false tax returns. This was part of a nationwide scheme that utilized abusive-trust tax shelters to defraud the IRS. Ellsworth’s fraudulent activities carried out through his business, Ellsworth Stauffer P.C., concealed more than $60 million in income from the IRS, resulting in approximately $17 million in lost tax revenue.
Ellsworth’s guilty plea highlights a significant victory in the fight against tax fraud. The case underscores the IRS and Justice Department’s commitment to identifying and prosecuting those who engage in tax evasion schemes. Businesses and individuals are reminded of the importance of complying with tax laws and the severe consequences of attempting to defraud the IRS.
Details of the Fraud
From 2017 to 2023, Ellsworth prepared and filed over 500 false tax returns for around 60 clients across the country. These clients, mostly successful business owners, used the tax shelter to underreport their income and evade tax liabilities. The scheme involved clients assigning nearly all their income to sham trusts and a so-called “private family foundation,” falsely claiming these as legitimate to avoid taxes. However, these entities were mere bank accounts under the clients’ control, not legitimate trusts or foundations.
Ellsworth was trained to prepare tax returns using these fraudulent methods, reporting income as trust income and offsetting it with deductions for personal expenses. He earned fees from the clients who participated in the tax shelter, furthering the scheme’s reach and impact.
Ellsworth’s guilty plea means he faces serious legal consequences. He is scheduled for sentencing on August 14 and could receive a maximum of three years in prison for each count of preparing and filing false tax returns. Additionally, he faces fines up to $250,000, a period of supervised release, and prosecution costs for each count. The final sentence will be determined by a federal district court judge, who will consider the U.S. Sentencing Guidelines and other relevant factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Special Agent in Charge Andy Tsui of IRS Criminal Investigation’s (IRS-CI) Denver Field Office announced Ellsworth’s guilty plea. The IRS-CI is leading the investigation, with Trial Attorneys Amanda R. Scott and Lauren K. Pope, along with Senior Litigation Counsel Corey J. Smith of the Tax Division, prosecuting the case.
Image: Depositphotos
The post originally appeared on following source : Source link
